Existing home sales and home prices both improved in August, with sales rising 7.8 percent on a seasonally adjusted annual basis. According to information released this morning by the National Association of Realtors® (NAR) August was the sixth consecutive month for a year-over-year median price increase. Median prices were up for both single family and attached units.
Total existing home sales based on completed transactions including single family homes, townhomes, condominiums, and cooperative apartments were at a seasonally adjusted annual rate of 4.82 million in August compared to 4.47 million in July. The August rate was 9.3 percent higher than the 4.41 million unit rate in August 2011.
Single family sales were up 8.0 percent to an annual rate of 4.30 million compared to 3.98 million in July and 3.91 million one year earlier. Existing condo and co-op sales increased 6.1 percent to an annual rate of 520,000 compared to 490,000 in July and were 4.0 percent above the 500,000 level of a year earlier. On a non-seasonally adjusted basis there were 52,000 home sales in August, unchanged from the previous month but up by 6,000 units from August 2011.
Lawrence Yun, NAR chief economist, said favorable buying conditions get the credit. "The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions," he said. "Inventories in many parts of the country are broadly balanced, favoring neither sellers nor buyers. However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices."
"The strengthening housing market is occurring even with difficult mortgage qualifying conditions, which is testament to the sizable stored-up housing demand that accumulated in the past five years," Yun added.
The median price of all housing types increased to $187,400 from $171,200 in August 2011, a 9.5 percent increase. NAR said the last time there were six back-to-back months with annual increases was from December 2005 to May 2006 and the annual increase in August was the strongest since January 2006 when the median price rose 10.2 percent on an annual basis. The median price of a single family home was $188,700 and a condo was $176,700 compared to $171,200 and $171,100 one year earlier. The average home price was $235,300 compared to 219,500 in August 2011.
Twelve percent of August sales were foreclosures and they sold for an average discount of 19 percent; 10 percent were short sales which were discounted an average of 13 percent. Distressed sales had a 24 percent market share in July and a 31 percent share in August 2011.
Total housing inventory at the end August rose 2.9 percent to 2.47 million existing homes available for sale, a 6.1-month supply at the current sales pace compared to 6.4 months in July. Listed inventory is 18.2 percent below a year ago when there was an 8.2-month supply.
Homes sold in August had spent a median of 70 days on the market, down one day from July but much improved form the median of 92 days in August 2011. Thirty-two percent of homes sold in August were listed for less than a month, while 19 percent were on the market for six months or longer.
First-time buyers made 31 percent of existing home purchases in August, down from 34 percent in July and investors purchased 18 percent of homes compared to 16 percent the previous month. All-cash sales, which are usually sales to investors, were unchanged from July at 27 percent of transactions and slightly lower than a year earlier when 29 percent of sales were for cash.
NAR President Moe Veissi said some buyers are involuntarily sidelined. "Total sales this year will be 8 to 10 percent above 2011, but some buyers are frustrated with mortgage availability. If most of the financially qualified buyers could obtain financing, home sales would be about 10 to 15 percent stronger, and the related economic activity would create several hundred thousand jobs over the period of a year."
Regionally, existing-home sales in the Northeast rose 8.6 percent to an annual pace of 630,000 in August and are also 8.6 percent above August 2011. The median price in the Northeast was $245,200, up 0.6 percent from a year ago.
Existing-home sales in the Midwest increased 7.7 percent in August to a level of 1.12 million and are 17.9 percent higher than a year ago. The median price in the Midwest was $152,400, up 7.8 percent from August 2011.
In the South, existing-home sales rose 7.3 percent to an annual pace of 1.90 million in August and are 11.1 percent above August 2011. The median price in the region was $160,100, up 6.5 percent from a year ago.
Existing-home sales in the West increased 8.3 percent to an annual level of 1.17 million in August but are unchanged from a year ago. With ongoing inventory shortages, the median price in the West was $242,000, which is 16.3 percent higher than August 2011.