Existing Home Sales

This monthly indicator from the National Association of Realtors (NAR) publishes the volume of existing home sales and sales prices of those homes. Home types include single-family, townhomes, condominiums, and co-ops. It’s worth following as purchases of existing homes reflect buyers’ confidence in their employment and future income growth. Home prices have a significant wealth effect on the economy as rising prices lead to an increase in consumer spending while falling prices can result in a notable decline in consumer behavior.

This release is typically published four to five weeks after the month being reported ends and usually has a strong correlation with Pending Home Sales (also published by NAR). The report includes national figures, breakdowns by region, unsold inventory in months, and the median and average sales prices nationwide.

This morning’s Existing Home Sales report for August came in at an annual rate of 4.04 million, down 0.7% from July, down 15.3% from last year, and worse than forecast. The median existing-home sales price rose to $407,100 in August. Prices are now 1.7% below their record high from last June. Unsold inventory is at a 3.3-month supply at the current sales price, which is identical to the July figure.

Sales of existing homes grew by 1.0% from the July reading in the Midwest, but fell by 2.6% and 1.1%, respectively, in the West and South. Sales in the Northeast were unchanged from July. Home prices increased month-over-month in all four regions, despite 30-year mortgage rates reaching 7.18% at the end of August (from Freddie-Mac).

All-cash sales made up 27% of transactions in August, up from 26% in July. Many of those cash sales are made by individual investors or second-home buyers, making up 16% of all-cash sales, the same share as the July report.

 Here are excerpts from today’s press release:

“Home sales have been stable for several months, neither rising nor falling in any meaningful way,” said NAR Chief Economist Lawrence Yun. “Mortgage rate changes will have a big impact over the short run, while job gains will have a steady, positive impact over the long run. The South had a lighter decline in sales from a year ago due to greater regional job growth since coming out of the pandemic lockdown.”

“Home prices continue to march higher despite lower home sales,” Yun said. “Supply needs to essentially double to moderate home price gains.”

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