Existing home sales, or completed transactions, fell 4.8 percent in August after three months of gains. Despite the decline for the month, sales remain 6.2 percent above a year ago and have risen to the 11 consecutive months prior, according to the National Association of Realtors (NAR).
Further, the share of first-time buyers improved this month, a welcome sign for the market.
Why is sales activity down?
Dr. Lawrence Yun, NAR chief economist, says home sales in August lost some momentum to close out the summer. “Sales activity was down in many parts of the country last month – especially in the South and West – as the persistent summer theme of tight inventory levels likely deterred some buyers,” he said.
“The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year.”
Median home price up 4.7 percent
The median existing home price hit $228,700, rising 4.7 percent above August 2014, marking the 42nd month in a row of annual gains.
Inventory rose 1.3 percent to 2.29 million existing homes available for sale, and is 1.7 percent lower than August 2014.
“With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall even with the overall pool of buyers shrinking because of seasonal factors,” adds Dr. Yun.
The share of first time buyers rose to 32 percent, up from 28 percent in July.
Homes stayed on the market for 47 days
In August, homes averaged 47 days no market, up from July’s 42 days on market, but below the 53 days in August. Short sales were on the market the longest at a median of 124 days in August, while foreclosures sold in 66 days and non-distressed homes took 45 days.
Two in five homes sold in August in less than a month.
Cash sales accounted for 22 percent of transactions, and distressed sales hovered at 7.0 percent for the second month in a row.
The West saw the biggest decline in sales
In the Northeast, completed transactions were unchanged from July, rising 6.1 percent from August 2014. The median price rose 2.4 percent for the year to $271,600.
Home sales fell 1.5 percent in the Midwest, but are up 5.8 percent from last year. Rising 4.0 percent from August 2014, the median price of a home hit $181,100.
In the South, existing home sales fell 6.6 percent for the month, yet rose 5.9 percent from August 2014. The median price in the South was up 6.0 percent for the year to $196,300.
Existing home sales fell 7.8 percent in the West, but are up 7.2 percent above August 2014. The median price was $321,300, fully 7.1 percent above this month last year.