Home Sales Dip, Prices Ease in August

A single family home is shown for sale in Encinitas, Calif., on May 22, 2013. (Mike Blake/File/Reuters)

Sales of previously occupied homes in the United States fell in August, breaking two consecutive months of growth, while prices eased somewhat, according to the National Association of Realtors (NAR).

Existing home sales—which include single-family houses, condominiums, and co-ops—fell 2 percent in August, after rising 1.6 percent in June and 2.2 percent in July, according to NAR data.

Condo and co-op sales led the decline, falling 2.8 percent, while single-family home sales dropped 1.9 percent.

“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,” Lawrence Yun, NAR’s chief economist, said in a statement.

The median home price fell slightly from $359,500 in July to $356,700 in August, though it remained nearly 15 percent higher than a year ago.

The hottest segment was the $250,000–$500,000 price range, with the median home in that category remaining on the market for just seven days—half the time of a home priced over $1 million.

The inventory of unsold homes dropped 1.5 percent to 1.29 million, or around 2.6 months at the current monthly pace.

“High home prices make for an unbalanced market, but prices would normalize with more supply,” Yun said, adding that securing a home remains “a major challenge for many prospective buyers.”

Mortgage rates remain at historic lows, with the benchmark 30-year fixed mortgage rate at 2.86 percent as of Sept. 16, according to Freddie Mac. By comparison, the 30-year hit a record high of 18.63 percent in 1981.

“Homeowners can capitalize on this prolonged period of ultra-low mortgage rates by refinancing and generating meaningful monthly savings to absorb the rising household costs seen in other areas,” Bankrate Chief Financial Analyst Greg McBride told The Epoch Times in an emailed statement.

The number of applications for home mortgages rose sharply last week, according to the Mortgage Bankers Association (MBA) composite index, which tracks mortgage originations.

Total mortgage application volume rose 4.9 percent last week, according to the MBA index data, which dovetails with recent federal figures showing a surge in building permits, pointing to a likely boost in future home sales.

Building permits—a leading indicator for future construction—climbed 6.0 percent in August to 1.728 million, the highest number since April 2021, according to a Sept. 21 Commerce Department report (pdf), a likely sign that inventory will expand going forward.

The gains in building permits were mostly concentrated in the multi-family home segment, however, which rose 19.7 percent over the month, while single-family house construction permits rose by a far less robust 0.6 percent.

Home construction saw a better-than-expected rebound in August after a contraction a month earlier, though the strength was all on the back of sharp gains in apartments.

Overall housing starts rose 3.9 percent in August but while multi-family starts rose by a sharp 21.6 percent, single-family starts posted their third consecutive month of declines, falling 2.8 percent.

Homebuilder confidence inched up in September after falling to its lowest reading in 13 months in August, according to the NAHB/Wells Fargo Housing Market Index (HMI), though optimism was held down by hiring difficulties and building material supply chain issues.