It was a disappointment, but at
least it wasn't a loss. Existing home sales, which were expected to increase in
August after four straight months of declines instead remained unchanged from
July. In fact, almost the entire report on August's existing home sales can be
summarized by the word, "flat."
Said sales of single-family homes,
townhouses, condos, and cooperative apartments were at the seasonally adjusted
rate of 5.34 million, identical to the July rate. Sales in July had fallen 1.5 percent below
those from a year earlier, and that too was unchanged in the August to August comparisons. Existing home sales were selling at an annual
rate of 5.42 million in August of last year.
Econoday
said the analysts it polls were expecting at least a modest increase after months
of lagging sales analysts. They forecasted
results in the range of 5.290 million to 5.460 million with a consensus of
5.360 million.
Sales
of both single-family homes and condos didn't sparkle either. Single-family sales were at the same 4.75
million annual rate as in July and condo sales remained at 590,000 units. Single family sales remain below sales a year
earlier, by 1.0 percent and condo sales are down 4.8 percent.
Lawrence Yun, NAR chief economist,
says the decline in existing home sales appears to have hit a plateau with
robust regional sales. "Strong gains in the Northeast and a moderate uptick in
the Midwest helped to balance out any losses in the South and West, halting
months of downward momentum," he said. "With inventory stabilizing and modestly
rising, buyers appear ready to step back into the market."
The median existing-home price for
all housing types in August was $264,800, a 4.6 percent gain from the August
2017 median of $253,100. This marks the 78th
straight month of year-over-year gains. Single-family homes posted a price
increase at the median of 4.9 percent to $267,300. Condo prices reflected a 2.0
percent appreciation at $244,500.
After some minor improvement in June
the number of available homes stayed at the same level to which they retreated
in July 1.92 million units. This is
however up from the 1.87 million homes that were for sales last August. The August inventory is estimated to be a 4.3
month supply at the current sales pace, about the same as in July and slightly
better than the 4.1 months' supply a year ago. Properties typically stayed on the market for
29 days in August, up from 27 days in July but down from 30 days a year ago.
Fifty-two percent of homes sold in August were on the market for less than a
month.
"While inventory continues to show
modest year over year gains, it is still far from a healthy level and new home
construction is not keeping up to satisfy demand," said Yun. "Homes continue to
fly off the shelves with a majority of properties selling within a month,
indicating that more inventory - especially moderately priced, entry-level
homes - would propel sales."
"Rising interests rates along with
high home prices and lack of inventory continues to push entry-level and first
time home buyers out of the market," he continued. "Realtors® continue to report that the demand
is there - that current renters want to become homeowners - but there simply are
not enough properties available in their price range."
First-time buyers were 31 percent of
sales in August, down from last month (32 percent) but the same as a year ago. Investors accounted for 13 percent of home sales,
the same as in July. Twenty percent of transactions were all cash and
distressed sales represented 3 percent, the lowest share since NAR started
tracking in in October 2008.
"Realtors® across the country report
that their clients waver about the decision to list their home; they are
excited by the prospect of receiving many offers, they are concerned that they
will not be able to find a new home to purchase," said NAR President Elizabeth
Mendenhall. "Unfortunately this
fluctuating view is contributing to the short supply of homes. Buyers hoping to
find an entry level home in this market should work with a Realtor® and be
prepared to move quickly as listings sell quickly."
There was a little more movement in
regional sales, however as Yun pointed out, sales in half of the regions offset
the rest. Sales in the Northeast bumped up by 7.6 percent in August to an annual
rate of 710,000 units which was however down 2.7 percent lower from a year
earlier. The median price in the Northeast was $292,800, a 2.6 percent annual
increase.
In the Midwest, existing-home sales
rose 2.4 percent to an annual rate of 1.28 million, remaining behind the
year-ago level by 0.8 percent. The median price in the region rose 3.4 percent
to $208,500.
Existing-home sales in the South were
at an annual rate of 2.23 million, an 0.4 percent decline from July but up from
2.19 million year-over-year. The median priced home in the South cost $227,900,
3.2 percent more than in August 2017.
Existing-home sales in the West
dropped 5.9 percent to an annual rate of 1.12 million and are 7.4 percent below
a year ago. The median price rose 4.8 percent to $392,900.