Existing-home sales slide in August

Following two straight months of gains, existing-home sales declined in August.

The National Association of Realtors (NAR) reported that total existing-home sales fell 2% to a seasonally adjusted rate of 5.88 million in August compared to the prior month. Sales include completed transactions of single-family homes, condos, townhomes, and co-ops.

Year-over-year, sales dipped 1.5% from a year ago and a rate of 5.97 million in August 2020.

Single-family home sales decreased to a seasonally adjusted annual rate of 5.19 million in August, down 1.9% from 5.29 million in July and down 2.8% from one year ago. 

“Sales slipped a bit in August as prices rose nationwide,” said Lawrence Yun, NAR’s chief economist. “Although there was a decline in home purchases, potential buyers are out and about searching, but much more measured about their financial limits, and simply waiting for more inventory.”

Total housing inventory at the end of August totaled 1.29 million units, down 1.5% from July’s supply and down 13.4% from one year ago (1.49 million). Unsold inventory sits at a 2.6-month supply at the current sales pace, unchanged from July but down from 3 months in August 2020.

The median existing-home price for all housing types in August was $356,700, up 14.9% from August 2020 ($310,400), as prices increased in each region. This marks 114 straight months of year-over-year gains.

The median existing single-family home price was $363,800 in August, up 15.6% from August 2020.

“High home prices make for an unbalanced market, but prices would normalize with more supply,” Yun said.

Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in August, even with July but up from 14% in August 2020. All-cash sales accounted for 22% of transactions in August, down from 23% in July and up from 18% in August 2020.

Here’s how existing-home sales performed on a regional basis:

• Existing-home sales in the Northeast slid 1.4% in August, recording an annual rate of 730,000, a 2.7% decline from August 2020. The median price in the Northeast was $407,800, up 16.8% from one year ago.
• Existing-home sales in the Midwest fell 1.4% to an annual rate of 1,370,000 in August, a 2.1% decline from a year ago. The median price in the Midwest was $272,200, a 10.5% jump from August 2020.
• Existing-home sales in the South slipped 3% in August, registering an annual rate of 2,550,000, down 0.8% from the same time one year ago. The median price in the South was $303,200, a 12.8% climb from one year ago.
• Existing-home sales in the West decreased 0.8%, posting an annual rate of 1,230,000 in August, down 1.6% from one year ago. The median price in the West was $507,900, up 11.4% from August 2020.

Today's NAR report follows the Sept. 21 Monthly Residential Construction Report that shows housing starts move ahead 3.9% in August.