U.S. Home Sales Remain Flat in August, Mixed Results Regionally
According to the National Association of Realtors, U.S. home sales nationwide remained flat in August 2018 after four straight months of decline. Sales gains in the Northeast and Midwest canceled out downturns in the South and West.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, did not change from July and remained at a seasonally adjusted rate of 5.34 million in August. Sales are now down 1.5 percent from a year ago (5.42 million in August 2017).
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, up 4.6 percent from August 2017 ($253,100). August's price increase marks the 78th straight month of year-over-year gains.
Total housing inventory at the end of August also remained unchanged from July at 1.92 million existing homes available for sale, and is up from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, consistent from last month and up from 4.1 months 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."
Realtor.com's Market Hotness Index, measuring time-on-the-market data and listings views per property, revealed that the hottest metro areas in August were Midland, Texas; Fort Wayne, Ind.; San Francisco-Oakland-Hayward, Calif.; Columbus, Ohio; and Boise City, Idaho.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 4.55 percent in August from 4.53 percent in July. The average commitment rate for all of 2017 was 3.99 percent.
"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," said Yun. "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. NAR's 2017 Profile of Home Buyers and Sellers - released in late 2017 - revealed that the annual share of first-time buyers was 34 percent.
"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.
All-cash sales were 20 percent of transactions in August, unchanged from July and a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in August, unchanged from July and down from 15 percent a year ago.
Distressed sales - foreclosures and short sales - were 3 percent of sales in August (lowest since NAR began tracking in October 2008), unchanged from last month and down from 4 percent a year ago. Two percent of June sales were foreclosures and 1 percent were short sales.
Single-family and Condo/Co-op Sales
Single-family home sales were at a seasonally adjusted annual rate of 4.75 million in August, unchanged from July, and are 1.0 percent below the 4.8 million sales pace a year ago. The median existing single-family home price was $267,300 in August, up 4.9 percent from August 2017.
Existing condominium and co-op sales were at a seasonally adjusted annual rate of 590,000 units in August (unchanged from last month), and are down 4.8 percent from a year ago. The median existing condo price was $244,500 in August, which is up 2.0 percent from a year ago.
Regional U.S. Housing Breakdown
August existing-home sales in the Northeast increased 7.6 percent to an annual rate of 710,000, but are still 2.7 percent below a year ago. The median price in the Northeast was $292,800, which is up 2.6 percent from August 2017.
In the Midwest, existing-home sales rose 2.4 percent to an annual rate of 1.28 million in August, but are still down 0.8 percent from a year ago. The median price in the Midwest was $208,500, up 3.4 percent from last year.
Existing-home sales in the South decreased 0.4 percent to an annual rate of 2.23 million in August, up from 2.19 million a year ago. The median price in the South was $227,900, up 3.2 percent from a year ago.
Existing-home sales in the West dropped 5.9 percent to an annual rate of 1.12 million in August, 7.4 percent below a year ago. The median price in the West was $392,900, up 4.8 percent from August 2017.