It’s not good news for would-be homebuyers.
Existing home sales fell once again in August as high mortgage rates and a persistent lack of inventory continue to influence the real estate market. According to the National Association of Realtors, total sales of previously occupied homes, which include single-family homes, townhomes, condos, and co-ops, dipped 0.7 percent last month to a seasonally adjusted annual rate of 4.04 million units. When compared to this same time last year, sales plunged 15.3 percent from where they were in August 2022.
While the number of sales decreased, the national median sales price reached $407,100 in August. That’s an almost 4 percent jump from one year ago and marks the third month in a row during which the median sales price has exceeded $400,000. “Home prices continue to march higher despite lower home sales,” said NAR Chief Economist Lawrence Yun. “Supply needs to essentially double to moderate home price gains.”
Speaking of total housing inventory, per the report, there were 1.1 million properties on the market, or a 3.3-month supply at the current sales pace, a decrease of 0.9 percent from July and 14.1 percent on a year-on-year basis. Due to the limited supply of properties, many aspiring home buyers are facing stiff competition, with 72 percent of properties that were sold in August on the market for less than a month.
Only 29 percent of sales came from first-time buyers, down from 30 percent in July but unchanged from the same time in 2022, while individual investors or second-home buyers bought 16 percent of homes and accounted for most of the all-cash transactions that occurred.
Of course, rising mortgage rates are yet another setback for buyers. According to Freddie Mac, the average rate on 30-year fixed-rate mortgages rose to 7.18 percent from 7.12 percent a week earlier and 6.02 percent from a year prior.