Existing-Home Sales Fall as Investors Retreat

Sales of existing homes fell in August to their second highest pace this year as investors pulled back from the market.

According to transaction data from the National Association of Realtors (NAR), existing-home sales last month were at a seasonally adjusted annual rate of 5.05 million, a decrease of 1.8 percent from July's sales pace of 5.14 million and a drop of 5.3 percent compared to last year.

A consensus forecast from economists called for a slight month-over-month pickup in sales to a rate of 5.18 million.

The group's chief economist, Lawrence Yun, pinned August's slower pace to a decline in all-cash purchases made by investors. According to NAR, all-cash sales represented 23 percent of August transactions, marking the lowest share since December 2009.

"On the positive side, first-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country," Yun said. "As long as solid job growth continues, wages should eventually pick up to steadily improve purchasing power and help fully release the pent-up demand for buying."

According to NAR's data, the share of first-time homebuyers in August remained unchanged from July at 29 percent.

Regionally, existing-home sales moved up in the Northeast and Midwest, climbing 4.7 percent and 2.5 percent from July, respectively. The usually more active South and West regions both posted declines, with sales falling 4.2 percent and 5.1 percent, respectively.

Year-over-year, sales were down in all regions.

Looking only at single-family transactions, the association reported home sales fell 1.8 percent to an adjusted rate of 4.46 million, putting sales nearly 5 percent short of where they were a year ago.

Including all housing types, the median existing-home price in August was $219,800, an increase of 4.8 percent over August 2013. It was the 30^th straight month of annual price gains, NAR reported.