Existing-home sales fell for the seventh consecutive month in August as prices rose again, the National Association of REALTORS® said.
Month over month, existing-home sales, which are completed transactions, including single-family homes, townhomes, condominiums and co-ops, slid 0.4% to 4.8 million, which is 19.9% lower than the year before.
“The housing sector is the most sensitive to and experiences the most immediate impacts from the Federal Reserve’s interest rate policy changes,” NAR chief economist Lawrence Yun said in a press release. “The softness in home sales reflects this year’s escalating mortgage rates. Nonetheless, homeowners are doing well with near nonexistent distressed property sales and home prices still higher than a year ago.”
The median existing-home price for all housing types in August was $389,500, a 7.7% rise from the year before. Despite the increase, August was the second month in a row that the median sales price declined after reaching a record high of $413,800 in June.
Total housing inventory at the end of August was 1,280,000 units, a 1.5% decrease from July and flat with the previous year. At the current sales pace, unsold inventory represents a 3.2-month supply, the same as July and up from 2.6 months in August 2021.
“The home buyers and sellers that drive the housing market have taken their foot off the gas in response to changing conditions — but they haven’t stopped entirely, by any means,” Compass president of national brokerage operations Neda Navab said. “The ongoing uncertainty and volatility posed by rising interest rates, high inflation and limited inventory have combined to lower the housing market’s speed limit, but today’s data proves there is still some gas in the tank. “
Properties typically remained on the market for 16 days in August, up from 14 in July and down from 17 days in August 2021. Eighty-one percent of homes sold in July were on the market for less than a month.
“Inventory will remain tight in the coming months and even for the next couple of years,” Yun said. “Some homeowners are unwilling to trade up or trade down after locking in historically low mortgage rates in recent years, increasing the need for more new-home construction to boost supply.”
By property type, single-family home sales in August slid to a seasonally adjusted annual rate of 4.28 million, down 0.9% from 4.32 million in July and down 19.2% from a year earlier. The median existing single-family home price was $396,300, up 7.6% on a year-over-year basis.
Existing condominium and co-op sales came in at a seasonally adjusted annual rate of 520,000 units in August, up 4% from July and down 24.6% compared to August 2021. The median existing condo price rose 7.6% year over year to $333,700.
In August, first-time buyers were responsible for 29% of sales, the same as July and August 2021, while individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes, up from 14% in July and 15% in August 2021.