Existing home sales increased 1.7% in August, and were up 13.2% from the same period a year ago to the highest level since February 2007. The National Association of Realtors (NAR) reported that August 2013 total existing home sales were at a seasonally adjusted rate of 5.48 million units combined for single-family homes, townhomes, condominiums and co-ops. That compares to 5.39 million units in July, and 4.84 million units during the same period a year ago. The South and Midwest increased 3.8% and 3.1% respectively, while the Northeast remained flat and the West decreased 2.3% from last month. All regions were up from a year ago: 18.9% in the Midwest, 13.5% in the South, 12.7% in the Northeast and 7.7% in the West.
The August 2013 level of single-family existing sales increased 1.7% from July to a seasonally adjusted 4.84 million sales, which was up 12.8% from the same month a year ago. Seasonally adjusted condominium and co-op sales were up 1.6% in August to a seasonally adjusted 640,000 units, and were up 16.4% from the same period a year ago.
The total housing inventory at the end of August increased 0.4% from the previous month to 2.25 million existing homes for sale. At the current sales rate, the August 2013 inventory represents a 4.9-month supply compared to a 5.0-month supply in July, and a 6.0-month supply of homes a year ago. NAR also reported that the August median time on market for all homes was 43 days, up slightly from 42 days in July but down from 70 days during the same month a year ago. NAR reported that 43% of all homes sold in August were on the market less than a month.
The share of distressed sales decreased in August to 12% of sales, the lowest level since NAR initiated monthly tracking in October 2008. The August distressed share was down from 15% in July, and down from 23% in June 2012. Distressed sales are defined as foreclosures and short sales sold at deep discounts.
The median sales price for existing homes of all types was $212,100 in August, slightly down from $212,400 in July, but up 14.7% from $184,900 during the same period a year ago. NAR reported that August represented the eighteenth consecutive monthly year-over-year price increase. The August median price also represented the strongest year-over-year increase since October 2005. The median condominium/co-op price increased from $208,100 in July to $211,700 in August, and was up 17.7% from the same period a year ago.
In August 2013, all cash sales were 32% of transactions compared to 31% in July, and 27% in August 2012. Investors accounted for 17% of August 2013 home sales, compared to 16% in July and 18% during the same month a year ago. First-time buyers accounted for 28% of August 2013 sales, down from 29% in July, and down from 31% during the same period a year ago.
NAR suggested that the rise in mortgage rates this summer combined with tight mortgage credit standards has already put a damper on affordability, especially for first-time buyers. As for constrained inventory, yesterday’s strong single-family starts report suggests an improving supply scenario down the road, consistent with builder confidence levels reported this summer. Last month’s slight decrease in the Pending Home Sales Index was a signal that any increase in existing sales would be moderate. Yet to be determined is the impact of yesterday’s announcement by the Federal Reserve not to immediately begin tapering its asset purchase program.