Mortgage Orb - Patrick Barnard on September 22, 2016
Existing-home sales were at a seasonally adjusted annual rate of 5.33 million in August – a decrease of 0.9% compared with a downwardly revised 5.38 million in July, according to the National Association of Realtors (NAR).
Although August was the second month in a row that existing-home sales decreased (they fell 3.2% in July), NAR pointed out in its report that they were still slightly higher than a year earlier.
NAR pointed out that despite low mortgage rates, higher home prices and a lack of inventory are keeping some would-be buyers at bay. Only the Northeast region saw a monthly increase in closings in August, where inventory is currently more adequate.
What’s more, the recent increase in the average income rate isn’t shaking out in increased home sales.
“Healthy labor markets in most [of] the country should be creating a sustained demand for home purchases,” said Lawrence Yun, chief economist for NAR, in a statement. “However, there’s no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn’t picking up to tame price growth and replace what’s being quickly sold.”
Added Yun, “Hopes of a meaningful sales breakthrough as a result of this summer’s historically low mortgage rates failed to materialize because supply and affordability restrictions continue to keep too many would-be buyers on the sidelines.”
As of the end of August, the average price for a home in the U.S. was $240,200, an increase of 5.1% compared with $228,500 in August 2015.
August was the 54th consecutive month of year-over-year price gains.
As of the end of the month, there were about 2.04 million existing homes for sale – about a 4.6-month supply at the current sales pace.
That’s a decrease in inventory of 3.3% compared with July and a decrease of 10.1% compared with August 2015.
The share of first-time buyers was about 31%.