Existing home sales reached a six-and-a
half year peak in August, increasing 1.7 percent to a seasonally adjusted
annual rate of 5.48 million units compared to 5.39 million in July. The sales
were 13.2 percent higher than one year earlier when sales were at the rate of
4.84 million units. However
the National Association of Realtors® (NAR) in releasing the figures said the
growth in sales may have peaked. Indeed
the August increase did moderate from that reported in July when sales grew 6.5
percent over June and were up 17.2 percent year-over-year.
NAR said sales of existing homes have
not been at such a high level since February 2007 when transactions hit a 5.79
million pace. Existing home sales,
including those of single family homes, townhomes, condominiums and coops, have
remained above their year-ago levels for the past 26 months.
Single-family home sales rose also rose 1.7 percent to a seasonally adjusted
annual rate of 4.84 million in August from 4.76 million in July. This is 12.8 percent above the 4.29
million-unit pace in August 2012. Existing condominium and co-op sales
were up 1.6 percent to an annual rate of 640,000 units from 630,000 in July,
and are 16.4 percent above the 550,000-unit level a year ago.
Lawrence Yun, NAR chief economist, said the market may be experiencing a
temporary peak. "Rising mortgage interest rates pushed more buyers to
close deals, but monthly sales are likely to be uneven in the months ahead from
several market frictions," he said. "Tight inventory is limiting choices
in many areas, higher mortgage interest rates mean affordability isn't as
favorable as it was, and restrictive mortgage lending standards are keeping
some otherwise qualified buyers from completing a purchase."
Home prices continued to climb, with
median prices rising over those of the previous year for the 18th consecutive
month and rising by double digits for the ninth. The national median price for
all housing types was $212,100 in August, up 14.7 percent from August 2012. This was the largest year-over-year price
gain since October 2005. The median
existing single-family home price was $212,200 in August, which is 14.4 percent
higher than a year ago and the condo price was $211,700, a 17.7 percent annual
The total housing inventory increased 0.4 percent from July to 2.25 million
existing homes, a 4.9 month supply at the current sales rate. Unsold inventory is 6.3 percent below a year
ago, when there was a 6.0-month supply. "Limited inventory in some areas
means multiple bidding remains a factor; 17 percent of all homes sold above the
asking price in August, although 63 percent sold below list price," Yun said.
The median time on market for all homes was 43 days in August, one day less
than in July but substantially faster than the 70 days required to sell a home
in August 2012. The median for
non-distressed sales was 41 days while short sales and foreclosure sales took
98 days and 52 days respectively. Forty-three
percent of homes sold during the month were on the market for less than a
Distressed homes, foreclosures and short sales, accounted for 12 percent of
August sales - 8 percent foreclosures and 4 percent short sales - down from 15
percent in July, and the lowest share since monthly tracking began in October
2008 and 12 percentage points lower than one year earlier. Foreclosures sold for an average discount of
16 percent below market value and short sales were discounted 12 percent. NAR said the decline in distressed sales is
in part responsible for the median price increases.
NAR President Gary Thomas said rising home values will encourage more people
to sell. "As the equity position of most homeowners continues to improve,
some who have been on the sidelines will list their home for sale. Most of those owners also will be buying
another home, but higher levels of new home construction going into 2014,
combined with some reduction in demand from less favorable affordability
conditions, will help to moderate price growth to more sustainable levels."
First-time buyers accounted for 28 percent of purchases in August and investors
bought 17 percent of homes. Both figures
are about the same as in July as was the 31 percent of sales that were all cash.
Existing-home sales in the Northeast were unchanged at an annual rate of
710,000 in August but were up 12.7 percent from August 2012. The median
price in the Northeast was $268,800, up 7.6 percent from a year ago.
Sales in the Midwest increased 3.1 percent in August to a pace of 1.32
million, 18.9 percent higher than a year ago. The median price in the
Midwest was $166,100, 10.0 percent above August 2012.
In the South, existing-home sales rose 3.8 percent to an annual level of
2.19 million and registered an annual increase of 13.5 percent. The median price in the South was $181,000, 14.6
percent higher than a year ago.
Existing-home sales in the West declined 2.3 percent to a pace of 1.26
million in August but are 7.7 percent higher than a year ago. With the
tightest regional inventory conditions, the median price in the West rose to
$287,500, which is 18.8 percent above August 2012.