The investors who kept the real estate market living and breathing through the worst days of the housing crash continue to drift out of the market the National Association of Realtors® (NAR) said on Monday.  As a result of this and other factors the sale of existing homes fell slightly in August, ending four straight months of gains.

Sales of existing homes including single-family houses, townhomes, condominiums, and co-op apartments, slipped 1.8 percent from July sales to a seasonally adjusted annual rate of 5.05 million.  Sales in July were revised down from 5.15 million to 5.14 million.  NAR said that, despite the slip, sales in August were still at the second highest rate of the year.  They still, however, remain 5.3 percent below the 5.33 unit level in August 2013, the second highest sales pace of that year.  Individual investors purchased 12 percent of homes in August, down from 16 percent in July and 17 percent in August 2013.

Sales of single family homes also slipped by 1.8 percent to a seasonally adjusted annual rate of 4.46 million from 4.54 million in July.  This puts single family sales 4.9 percent below the rate of 4.69 million units in August 2013.  Existing condo and co-op sales were down 1.7 percent to a rate of 590,000 units from 600,000 the previous month.  Those sales are off of the 640,000 unit pace of a year earlier by 7.8 percent.

Lawrence Yun, NAR chief economist, says sales activity remains stronger than earlier in the year, but fell last month as investors stepped away. "There was a marked decline in all-cash sales from investors," he said. "On the positive side, first-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country."

Yun adds, "As long as solid job growth continues, wages should eventually pick up to steadily improve purchasing power and help fully release the pent-up demand for buying."

Probably reflecting the pull-back from investors, all-cash sales dropped for the second month to 23 percent of total transactions compared to 29 percent in July.  This was the lowest overall share since December 2009.  NAR President Steve Brown says a gradual decline in investor activity, many who pay in cash, is good for the market and creates more opportunity for buyers who rely on financing to purchase a home.  Sixty-four percent of investors paid cash in August.

The median existing-home price for all housing types in August was $219,800, a year-over-year increase of 4.8 percent and the 30th straight month of annual gains. The median existing single-family home price was $220,600 in August, up 5.2 percent from August 2013 and the median existing condo price was $213,900 in August, 2.1 percent higher than a year earlier.

The percentage of first time home buyers has remained below 30 percent for 16 of the past 17 months.  The first-time buyer share in August remained unchanged from July's 29 percent.   

Six percent of sales in August were of foreclosed property and 2 percent were short sales, down from a total distressed share of 12 percent of home sales one year earlier.  Foreclosures sold for an average discount of 14 percent below market value in August compared to 20 percent in July, while short sale discounts fell from 14 percent in July to 10 percent in August.

Total housing inventory at the end of August declined 1.7 percent to 2.31 million existing homes available for sale, a 5.5-month supply at the current sales pace. This unsold inventory is 4.5 percent higher than a year ago, when there were 2.21 million existing homes available for sale.

Median marketing time increased from July to August by five day to 53 days for the typical property and was ten days longer than a year earlier.  Short sales were on the market for a median of 135 days in August, while foreclosures sold in 53 days and non-distressed homes typically took 52 days. Forty percent of homes sold in August were on the market for less than a month.

On a regional basis, existing home sales in the Northeast jumped 4.7 percent to an annual rate of 670,000, but remain 4.3 percent below a year ago. The median price in the Northeast was $265,800, which is 0.8 percent lower than a year ago.

In the Midwest, existing-home sales increased 2.5 percent to an annual level of 1.24 million in August, but remain 3.9 percent below August 2013. The median price in the Midwest was $173,800, up 5.9 percent from a year ago.

Existing-home sales in the South declined 4.2 percent to an annual rate of 2.03 million in August, and are now down 4.2 percent from August 2013. The median price in the South was $186,700, up 4.7 percent from a year ago.

Existing-home sales in the West fell 5.1 percent to an annual rate of 1.11 million in August, and are 9.8 percent below a year ago. The median price in the West was $301,900, which is 5.4 percent above August 2013.

NAR President Brown also said that Realtors are pleased by FHA's recent policy change eliminating post-payment interest charges on its insured single-family mortgages. "The prepayment penalty placed an unfair and unreasonable burden on consumers who already face high housing and closing costs," he said.