Existing-home sales marked their third consecutive month of positive gains in August, according to the latest data from the National Association of Realtors, with total existing-home sales—including single-family, townhomes, condominiums, and co-ops—rising 2.4% from July to a seasonally adjusted annual rate of 6 million in August. Sales rose by 10.5% year over year, up from an annual rate of 5.43 million in August 2019.
“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” says Lawrence Yun, NAR chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”
The median existing-home price for all housing types rose 11.4% YOY, up from $278,800 in August 2019 to $310,600 in August 2020. This marks 102 consecutive months of year-over-year gains. Total housing inventory fell by 0.7% from July 2020 and 18.6% from one year ago, down to 1.49 million units in August. Unsold inventory sits at a three-month supply, down from four months one year ago.
Alone, single-family home sales sit at a seasonally adjusted annual rate of 5.37 million in August, up 11% from one year ago and 1.7% from July. The median existing single-family home price was $315,000 in August, up 11.7% from one year ago.
Existing lumber scarcity has worsened in the past year due to skyrocketing prices and wildfires in California, says Yun. “Over recent months, we have seen lumber prices surge dramatically,” he says. “This has already led to an increase in the cost of multifamily housing and an even higher increase for single-family homes.”
This supply shortage comes as demand for new housing continues to rise, especially in areas where residents can work from home. “Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” Yun says. “To assure broad gains in homeownership, more new homes need to be constructed.”
Properties typically remained on the market for 22 days in August, down from 31 days in August 2019. Sixty-nine percent of homes sold in August 2020 were on the market for less than a month. First-time buyers made up 33% of August sales, up from 31% in August 2019. Individual investors, or second-home buyers, purchased 14% of homes in August, and all-cash sales accounted for 18% of transactions. Distressed sales represented less than 1% of August 2020 sales, down from 2% one year ago.
Each of the four major regions also saw year-over-year and month-over-month sales growth. The Northeast saw the greatest improvement on a month-over-month basis at 13.8%, while the South had the greatest YOY sales growth at 13%.
