Rising home prices across the country put a damper on home sales during August.
Slowdown in Home Purchase Market in August
After two consecutive months of rising home sales, ever-rising home prices squashed home sales in August.
According to a monthly report by the National Association of REALTORS®(NAR), existing home sales dropped -2% m/m. Existing home sales included purchase transactions of single-family homes, townhomes, condominiums and co-ops.
Lawrence Yun, chief economist with NAR, said that existing home sales slowed in August due to increasing prices. “Although there was a decline in home purchases, potential buyers are out and about searching, but much more measured about their financial limits, and simply waiting for more inventory.”
Yun continued by saying that such inflated prices have created “…an unbalanced market, but prices would normalize with more supply.”
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Median Home Price in August
The median home price in August, according to NAR, was $356,7000, an increase of +14.9% y/y from August 2020’s median price of $310,400.
August was the 114 consecutive month of year-over-year rising home prices.
Housing inventory also dropped slightly on a month-over-month basis with a total of 1.29M for-sale units, -1.5% from July and down -13.4% on a year-over-year basis, according to NAR.
New Inventory Expected
Mike Fratantoni, chief economist with the Mortgage Bankers Association, is anticipating the completion of more than 700,000 new housing units in the coming months.
Likewise, Zillow’s economist Matthew Speakman is anticipating some “breathing room” for potential homebuyers. Speakman is seeing more and more for-sale homes that are “…undergoing price cuts…”
More home choices mean lower home prices.
Thanks to the National Association of REALTORS• and HousingWire.
