Despite an easing of price growth and a rebound in sales to first–time buyers, sales of existing homes slipped in August following three straight months of gains, according to the National Association of Realtors.
None of the four major U.S. regions tracked by the Realtors saw sales increases in August.
Limited availability of homes on the market is making it difficult for some prospective home buyers to take advantage of low interest rates and downsize — or upsize — after a recovery in property values. Total housing inventory at the end of August rose 1.3 percent to 2.29 million existing homes available for sale, but is 1.7 percent lower than a year ago (2.33 million).
Unsold inventory is at a 5.2–month supply at the current sales pace, up from 4.9 months in July.
However, the percent share of first–time buyers rebounded to 32 percent in August, up from 28 percent in July and matching the highest share of the year set in May. A year ago, first–time buyers represented 29 percent of all buyers.
Total existing–home sales, which are completed transactions that include single–family homes, townhomes, condominiums and co–ops, fell 4.8 percent to a seasonally adjusted annual rate of 5.31 million in August, from a slight downward revision of 5.58 million in July. The decrease in August was the biggest in seven months. The median forecast of most economists surveyed by Bloomberg called for an easing to a 5.5 million annual rate.
Despite the decline for August, sales have risen year–over–year for 11 consecutive months and are 6.2 percent above a year ago (5.00 million).
Lawrence Yun, NAR chief economist, says tight inventories were big factors.
“Sales activity was down in many parts of the country last month — especially in the South and West — as the persistent summer theme of tight inventory levels likely deterred some buyers,” Yun said. “The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year.”
The median existing–home price for all housing types in August was $228,700, which is 4.7 percent above August 2014 ($218,400). August’s price increase marks the 42nd consecutive month of year–over–year gains.
“With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall even with the overall pool of buyers shrinking because of seasonal factors,” adds Yun.