“It’s very concerning to see that inventory conditions not only show no signs of improving but have actually worsened in recent months from their already suppressed levels a year ago.” NAR’s chief economist – Lawrence Yun
The National Association of Realtors® (NAR) issued their latest report yesterday showing that existing-home sales declined .9% in August for the second straight month. The NAR blamed the lackluster sales on lack of listing inventory and higher home prices despite mortgage rates near record lows.
Total existing-home sales for all single-family homes were down across the U.S. to a seasonally adjusted annual rate of 5.33 million in August from a downwardly revised 5.38 million in July. But are still up just a tad (0.8 percent) than a year ago (5.29 million).
The lack of available homes on the market is causing a supply and demand problem and also rising home values in many parts of the country.
In August, the total housing inventory was down 3.3% to 2.04 million existing homes available for sale, and is now 10.1% lower than a year ago (2.27 million) and has declined year-over-year for 15 straight months. Unsold inventory is at a 4.6-month supply at the current sales pace, which is down from 4.7 months in July, according to the NAR.
The average price for a home increased 5.1% from August 2015 ($228,500) to $240,200 this year which was the 54th consecutive month of year-over-year gains.
Properties stayed on the market for an average of 36 days in August, unchanged from July and down considerably from a year ago (47 days). Short sales took the longest to sell with a median of 144 days, while foreclosures sold in 42 days and non-distressed homes took 35 days. Forty-six percent of homes sold in August were on the market for less than a month.
The hottest markets in August with the fastest home sales were all in the West. San Francisco-Oakland-Hayward, Calif., San Jose-Sunnyvale-Santa Clara, Calif., and Seattle-Tacoma-Bellevue, Wash., all at a median of 33 days; Denver-Aurora-Lakewood, Colo., 36 days; and Vallejo-Fairfield, Calif., at a median of 37 days.
Lawrence Yun, NAR chief economist had said, “Healthy labor markets in most the country should be creating a sustained demand for home purchases,” he said. “However, there’s no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn’t picking up to tame price growth and replace what’s being quickly sold.”
Added Yun, “Hopes of a meaningful sales breakthrough as a result of this summer’s historically low mortgage rates failed to materialize because supply and affordability restrictions continue to keep too many would-be buyers on the sidelines.”
Here is the Regional Breakdown from the NAR:
August existing-home sales in the Northeast jumped 6.1 percent to an annual rate of 700,000, which is unchanged from a year ago. The median price in the Northeast was $274,100, which is 0.8 percent above August 2015.
In the Midwest, existing-home sales decreased 0.8 percent to an annual rate of 1.27 million in August, but are still 0.8 percent above a year ago. The median price in the Midwest was $190,700, up 5.5 percent from a year ago.
Existing-home sales in the South in August fell 2.7 percent to an annual rate of 2.16 million, but are still 0.9 percent above August 2015. The median price in the South was $209,700, up 6.7 percent from a year ago.
Existing-home sales in the West lessened 1.6 percent to an annual rate of 1.20 million in August, but are still 0.8 percent higher than a year ago. The median price in the West was $347,400, which is 9.2 percent above August 2015.