As the housing market continued its rebound from the pandemic, existing home sales, as reported by the National Association of Realtors (NAR), reached its highest level in nearly 14 years in August.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, rose 2.4% to a seasonally adjusted annual rate of 6.00 million in August, the highest level since December 2006. On a year-over-year basis, sales were 10.5% higher than a year ago.
The first-time buyer share decreased to 33% in August from 34% last month but is higher than a year ago (31%). However, price gains threaten this share in the future. The August inventory level fell to 1.49 million units from 1.50 million units in July and is down from 1.83 million units a year ago.
At the current sales rate, the August unsold inventory represents a 3.0-month supply, down from 3.1-month in July and 4.0-month a year ago. This low level supply of resale homes is good news for home construction.
Homes stayed on the market for an average of just 22 days in August, equal to last month and down from 31 days a year ago. In August, 69% of homes sold were on the market for less than a month.
The August all-cash sales share was 18% of transactions, up from 16% last month but down from 19% a year ago.
Despite the recent fluctuation in sales, home prices remained strong. The August median sales price of all existing homes was $310,600, up 11.4% from a year ago, representing the 102nd consecutive month of year-over-year increases. The median existing condominium/co-op price of $273,300 in August was up 7.8% from a year ago.
Regionally, all four regions saw month-over-month gains for existing home sales in August, ranging from 0.8% in the South and the West to 13.8% in the Northeast. On a year-over-year basis, sales grew in all four regions as well, with the South seeing the greatest gain (13.0%).
Though sales have picked up and demand remains strong due to low mortgage rates, the imbalance between housing supply and demand could hamper future sales. Supply shortages have worsened as lumber prices soared more than 170% since mid-April, which led to an increase in the cost of home construction. Low inventory will not only continue to drive up home prices but also hurt affordability and homeownership attainment. More listings and home construction are needed to meet this rising demand.
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