August Existing Sales Remain Sluggish


August existing sales declined for the fourth time in five months, and only some of that decline was attributed to Hurricane Harvey. Despite gains in the Northeast and Midwest, existing home sales fell 1.7% in August, and remained only 0.2% above the level a year ago. Some 51% of homes sold last month were on the market less than a month, unchanged from the previous month. August inventory declined 2.1%, and is now 6.5% lower than a year ago, having fallen year-over-year for the 27th consecutive month. The National Association of Realtors (NAR) reported that at the current sales rate, the August unsold inventory represents a 4.2-month supply, unchanged from last month, but down from a 4.5 -month supply a year ago. August existing sales reached a seasonally adjusted rate of 5.35 million units. Total existing home sales include single-family homes, townhomes, condominiums and co-ops.

August existing sales increased 10.8% in the Northeast and 2.4% in the Midwest, but fell 4.8% in the West and 5.7% in the South. Year-over-year, the Northeast increased 1.4%, and the Midwest and West both increased 0.8%. The South decreased 0.9% from the same month a year ago.

Homes stayed on the market for 30 days in August, unchanged from July, but down from 36 days a year ago. The August first-time home buyer share was 31%, down from 33% in July, and unchanged from a year ago.

The August all-cash sales share was 20%, up from 19% in July and 18% in June, but down from 22% a year ago. Individual investors purchased a 15% share of sales in August, up from a 13% share in July, and up from 12% a year ago.

The August median sales price fell for a second consecutive month to $253,500 from a revised $258,100 in July and $263,300 in June, but was up 5.6% from last year, representing the 66th consecutive month of year-over-year increases. The August median condominium/co-op price also fell for the second consecutive month to $237,600 from $240,400 in July and $246,000 in June, but was up 5.4% from a year ago.

Sales will be lost the rest of the year in Houston from Hurricane Harvey and in the most severely affected areas in Florida from Hurricane Irma; however, NAR reported that nearly all of the lost sales will appear in 2018. July pending sales decreased slightly, so the continued slump in existing sales was not unexpected as the chronically insufficient inventory continued to hamper sales. Builder confidence dropped as the hurricanes added a dose of uncertainty. However, single-family starts posted a slight gain in August, and personal income gains and jobs will continue to spur more first-time buyers to enter the market.

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