Total existing-home sales, which include sales of single-family homes, townhomes, condominiums, and co-ops, decreased for the seventh consecutive month in August, according to the National Association of Realtors (NAR). Sales contracted by 0.4% from July to a seasonally adjusted annual rate of 4.8 million in August, a smaller magnitude change than the 5.9% month-over-month contraction in July. On a year-over-year basis, sales decreased by 19.9% in August.
“The housing sector is the most sensitive to and experiences the most immediate impacts from the Federal Reserve’s interest rate policy changes,” says NAR chief economist Lawrence Yun. “The softness in home sales reflects this year’s escalating mortgage rates. Nonetheless, homeowners are doing well with near nonexistent distressed property sales and home prices still higher than a year ago.”
Total housing inventory registered at the end of August was 1,280,000 units, a decrease of 1.5% from July and unchanged from the previous year. Unsold inventory sits at a 3.2-month supply at the current sales pace, level with July and up from 2.6 months in August 2021.
“Inventory will remain tight in the coming months and even for the next couple years,” Yun says. “Some homeowners are unwilling to trade up or trade down after locking historically low mortgage rates in recent years, increasing the need for more new-home construction to boost supply.”
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.22% in August, down from 5.41% in July. The average commitment rate across all of 2021 was 2.96%.
In August, the median existing-home price for all housing types was $389,500, a 7.7% increase on a year-over-year basis. According to the NAR, August was the 126th consecutive month of year-over-year price increases. August marked the second consecutive month that the median sales price retracted after reaching a record high of $413,800 in June.
Properties remained on the market for 16 days in August, up from 14 days in July and down from 17 days in August 2021. Over 80% of homes sold in August were on the market for less than a month, and first-time buyers accounted for 29% of sales last month.
Single-family home sales decreased 0.9% on a month-over-month basis in August to a seasonally adjusted rate of 4.28 million. On a year-over-year basis, single-family sales contracted 19.2%. The median existing single-family home price increased 7.6% on a year-over-year basis to $396,300.
Existing-home sales in the Northeast region increased 1.6% on a month-over-month in August but decreased 13.7% on a year-over-year basis. Prices increased 1.5% in the region compared with August 2021. Sales in the Midwest declined 3.3% compared with July and 15.9% compared with the prior-year period. Prices in the Midwest rose 6.6% compared with August 2021.
Existing-home sales were identical to July levels in the South but down 19.3% compared with one year ago. The median price in the region rose 12.4% on a year-over-year basis. In the West region, existing-home sales increased 1.1% compared with July but decreased 29% compared with August 2021. On a year-over-year basis, prices increased 7.1% in the West region.
According to the NAR, Miami (+33.4%), Memphis, Tennessee (+25.8%), and Milwaukee (+25.0%) experienced the largest year-over-year median list price growth in August. Phoenix (+30.9 percentage points), Austin, Texas (+24.8%), and Las Vegas (+24.4%) reported the highest increase in the share of homes that had their prices reduced compared with August 2021.
