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Existing-Home Sales Slip for Seventh Consecutive Month

Existing-home sales experienced another slight dip in August, marking the seventh consecutive month of declines, according to the National Association of REALTORS. New data also found that month-over-month sales varied across the four major U.S. regions as two regions recorded increases, one was unchanged and the other posted a drop. However, on a year-over-year basis, sales fell in all regions.

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, notched a minor contraction of 0.4% from July to a seasonally adjusted annual rate of 4.80 million in August. Year-over-year, sales also faded by 19.9%, –approximately 5.99 million in August 2021.

Key Findings

  • Existing-home sales decreased for the seventh straight month to a seasonally adjusted annual rate of 4.80 million. Sales tailed off 0.4% from July and 19.9% from the previous year.
  • The median existing-home sales price rose 7.7% from one year ago to $389,500.
  • After five successive monthly increases, the inventory of unsold existing homes dwindled to 1.28 million by the end of August, or the equivalent of 3.2 months at the current monthly sales pace.

Median Home Listing Price

“Existing home sales steadied in August, following a modest decline in July pending home sales, said Danielle Hale, Chief Economist for Realtor.com. "Mortgage rates were generally lower in July after surging in June, giving potential shoppers motivation to find a home so that they could lock in a somewhat lower rate. More recently, mortgage rates climbed higher in anticipation of further Fed rate hikes, such as the one widely expected later today. Higher financing costs have dampened buyer purchasing power, and are one of several factors causing a pullback in demand as home shoppers navigate budget priorities amid ongoing and widespread inflation. The median home sales price continued to climb, but dropped below double-digit pace. "

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 –identical to July and up from 2.6 months in August 2021.

The median existing-home price for all housing types in August was $389,500, a 7.7% jump from August 2021 ($361,500), as prices ascended in all regions. This marks 126 consecutive months of year-over-year increases, the longest-running streak on record. However, it was the second month in a row that the median sales price retracted after reaching a record high of $413,800 in June, the usual seasonal trend of prices declining after peaking in the early summer.

"The housing sector is the most sensitive to and experiences the most immediate impacts from the Federal Reserve's interest rate policy changes," said 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. Inventory will remain tight in the coming months and even for the next couple of years. Some homeowners are unwilling to trade up or trade down after locking in historically-low mortgage rates in recent years, increasing the need for more new-home construction to boost supply."

Properties typically remained on the market for 16 days in August, up from 14 days in July and down from 17 days in August 2021. Eighty-one percent of homes sold in August 2022 were on the market for less than a month.

First-time buyers were responsible for 29% of sales in August, consistent with July 2022 and August 2021. NAR's 2021 Profile of Home Buyers and Sellers reported that the annual share of first-time buyers was 34%.

All-cash sales accounted for 24% of transactions in August, the same share as in July, but up from 22% in August 2021. Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in August, up from 14% in July and 15% in August 2021. Distressed sales –foreclosures and short sales– represented approximately 1% of sales in August, essentially unchanged from July 2022 and August 2021.

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%. Realtor.com's Market Trends Report in August shows that the largest year-over-year median list price growth occurred in Miami (+33.4%), Memphis (+25.8%) and Milwaukee (+25.0%). Phoenix reported the highest increase in the share of homes that had their prices reduced compared to last year (+30.9 percentage points), followed by Austin (+24.8 percentage points), and Las Vegas (+24.4 percentage points).

"In July, we saw the first sign that the housing market’s refresh may affect homeowners’ eagerness to sell, and that hesitation continued in August, as the number of newly-listed homes sank by 13%," said Hale. "Survey data suggests that recent sellers are still largely satisfied with the outcome of their home sale, if not quite as overwhelmingly so as last year.  And as homeowners sit on a record amount of equity, they have options. However, those hoping to sell and buy at the same time –as nearly three-quarters of potential sellers planned this year– will find that the 66% jump in mortgage payments compared to one year ago has taken some options off of the table, for now."

Newly Listed Homes Count

Single-family and Condo/Co-op Sales

Single-family home sales decreased to a seasonally adjusted annual rate of 4.28 million in August, down 0.9% from 4.32 million in July and down 19.2% from the previous year. The median existing single-family home price was $396,300 in August, up 7.6% from August 2021.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 520,000 units in August, up 4.0% from July and down 24.6% from one year ago. The median existing condo price was $333,700 in August, an annual increase of 7.8%.

"In a sense, we're seeing a return to normalcy with the homebuying process as it relates to home inspections and appraisal contingencies, as those crazy bidding wars have essentially stopped," said NAR President Leslie Rouda Smith, a REALTOR from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. "In an ever-changing market, REALTORS help consumers successfully manage the complexities of buying or selling homes."

Regional Breakdown

  • Existing-home sales in the Northeast grew 1.6% from July to an annual rate of 630,000 in August, down 13.7% from August 2021. The median price in the Northeast was $413,200, an increase of 1.5% from the previous year.
  • Existing-home sales in the Midwest fell 3.3% from the prior month to an annual rate of 1,160,000 in August, retreating 15.9% from August 2021. The median price in the Midwest was $287,900, up 6.6% from the previous year.
  • At an annual rate of 2,130,000 in August, existing-home sales in the South were identical to July but down 19.3% from one year ago. The median price in the South was $356,000, an increase of 12.4% from August 2021.
  • Existing-home sales in the West expanded 1.1% compared to last month to an annual rate of 880,000 in August, down 29.0% from this time last year. The median price in the West was $602,900, a 7.1% increase from August 2021.

"One way  sellers can increase their homebuying opportunities is to consider moving to a different, lower cost area. According to the Realtor.com August Hottest Markets Report, northeastern and midwestern metros that offer relative real estate affordability continue to be sought out by buyers,  as homes continue to sell relatively quickly in these areas.”

To read the full report, including more data and methodology, click here.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport, with more than six years of writing experience. She has served as Editor-in-Chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington. She has covered events such as the Byron Nelson, Pac-12 Conferences, the Women in Dallas Film Festival, to freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, she is an avid jazz lover and reader. She can be reached at [email protected]
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