As tight inventory continued to push up prices, existing home sales fell in August but remain above pre-pandemic levels, according to the National Association of Realtors (NAR). Though the median existing home prices has increased 34% since January 2020, housing demand remains strong thanks to low mortgage rates and buyers are waiting for more inventory.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, decreased 2.0% to a seasonally adjusted annual rate of 5.88 million in August. On a year-over-year basis, sales were 1.5% lower than a year ago, the first annual decline since August 2020.
The first-time buyer share slightly dropped to 29% in August, down from 30% in July and 33% a year ago. This may be a sign that higher prices are pricing out younger buyers. The August inventory level declined from 1.31 to 1.29 million units and is still down from 1.49 million units a year ago.
At the current sales rate, August unsold inventory sit at a 2.6-month supply, unchanged from July but still down from 3.0-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 17 days in August, an all-time low, unchanged from July and down from 22 days a year ago. In August, 87% of homes sold were on the market for less than a month.
The August all-cash sales share was 22% of transactions, down from 23% last month but up from 18% a year ago.
Tight supply continues to push up home prices. The August median sales price of all existing homes was $356,700, up 14.9% from a year ago, representing the 114th consecutive month of year-over-year increases. The median existing condominium/co-op price of $302,800 in August was up 10.8% from a year ago.
Geographically, all four regions saw a decline in existing home sales on both a month-over-month and a year-over-year perspective in August.
Meanwhile, the Pending Home Sales Index (PHSI), also reported by the NAR, is a forward-looking indicator based on signed contracts. The PHSI decreased 1.8% from 112.7 to 110.7 in July. On a year-over-year basis, sales were 8.5% lower than a year ago.