Existing home sales across the U.S. decreased during August, as did inventory, while the median sales price for existing homes rose from a year ago, according to the National Association of REALTORS® (NAR).
The sales drop – down 0.4% from July and 19.9% from the previous year — marked the seventh consecutive month of decreases. Year-over-year median prices for existing home sales increased 7.7%.
The NAR report on August activity showed a decline in unsold inventory, reversing five straight months of increase. At month end, there were 1.28 million unsold homes, or the equivalent of 3.2 months of supply. For the same month a year ago supply stood at 2.6 months.
Month-to-month sales activity varied across the four major U.S. regions tracked by NAR, but on a year-over-year basis, sales contracted in all regions.
“The housing sector is the most sensitive to and experiences the most immediate impacts from the Federal Reserve’s interest rate policy changes,” said NAR Chief Economist Lawrence Yun. “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.”
NAR reported a seasonally adjusted annual rate of 4.8 million completed sales in its report for August, down from 5.99 million during August 2021. The median price for the completed transactions in the latest report was $389,500. That price is 7.7% higher than twelve months ago. Prices rose in all regions.
The price increase for August was the 126th consecutive month of year-over-year increases, the longest-running streak on records. However, the report noted, it was the second straight month that median prices slipped after reaching a record high of $413,800 in June. NAR said the retraction reflected the usual seasonal trend of prices declining after peaking in the early summer.
Yun expects inventory to remain tight in the coming months “and even for the next couple of years,” adding, “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.”
The report for August also showed:
- 81% of homes sold during August were on the market for less than one month. Properties typically remained on the market for 16 days, up from July’s figure of 14 days, but down from twelve months ago when marketing time averaged 17 days.
- First-time buyers accounted for 29% of the sales, consistent with the prior month and with August 2021.
- All-cash sales made up 24% of the month’s transactions, matching July but 2% higher than the same month a year ago.
- Distressed sales, which include foreclosures and short sales, represented about 1% of the sales, about the same as July 2022 and August 2021.
Commenting on the numbers, NAR President Leslie Rouda Smith said, “In a sense, we’re seeing a return to normalcy with the homebuying process as it relates to home inspections and appraisal contingencies, as those crazy bidding wars have essentially stopped.” She is a REALTOR® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas.
The report of existing-home sales includes single family homes, townhomes, condominiums, and co-ops.
The National Association of REALTORS® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.