Existing-home sales continued to improve in August and the national median price rose on a year-over-year basis for the sixth straight month, according to the NATIONAL ASSOCIATION OF REALTORS®.
Sales of existing single-family homes, townhomes, condominiums, and co-ops rose 7.8%, as 4.82 million homes changed hands last month, up from from 4.47 million in July. Compared to last year, home sales are 9.3% higher this year.
Favorable buying conditions get the credit for boosting sales, said NAR Chief Economist Lawrence Yun. “The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions,” he said. “Inventories in many parts of the country are broadly balanced, favoring neither sellers nor buyers. However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices.”
The strengthening housing market is occurring even with difficult mortgage qualifying conditions, which is testament to the sizable stored-up housing demand that accumulated in the past five years, Yun added.
Home prices up, too
The national median existing-home price was $187,400 in August, up 9.5% from a year ago. The last time there were six back-to-back monthly price increases from a year earlier was from December 2005 to May 2006. The August increase was the strongest since January 2006 when the median price rose 10.2% from a year earlier.
Distressed homes — foreclosures and short sales sold at deep discounts — accounted for 22% of August sales (12% were foreclosures and 10% were short sales), down from 24% in July and 31% in August 2011.
Foreclosures sold for an average discount of 19% below market value in August, while short sales were discounted 13%.
Total housing inventory at the end August rose 2.9% to 2.47 million existing homes available for sale, which represents a 6.1-month supply at the current sales pace, down from a 6.4-month supply in July. Listed inventory is 18.2% below a year ago, when there was an 8.2-month supply.
The median time on market was 70 days in August, consistent with 69 days in July but down 23.9% from 92 days in August 2011. Thirty-two percent of homes sold in August were on the market for less than a month, while 19% were on the market for six months or longer.
Some home buyers sidelined
NAR President Moe Veissi said some buyers are involuntarily sidelined. “Total sales this year will be 8% to 10% above 2011, but some buyers are frustrated with mortgage availability. If most of the financially qualified buyers could obtain financing, home sales would be about 10% to 15% stronger, and the related economic activity would create several hundred thousand jobs over the period of a year.”
First-time buyers accounted for 31% of purchasers in August, down from 34% in July; they were 32% in August 2011.
All-cash sales were unchanged at 27% of transactions in August; they were 29% in August 2011.
Investors, who account for most cash sales, purchased 18% of homes in August, up from 16% in July; they were 22% in August 2011.
Single-family home sales rose 8.0% to a seasonally adjusted annual rate of 4.30 million in August from 3.98 million in July, and are 10.0% above the 3.91 million-unit pace in August 2011. The median existing single-family home price was $188,700 in August, up 10.2% from a year ago.
Existing condominium and co-op sales increased 6.1% to a seasonally adjusted annual rate of 520,000 in August from 490,000 in July, and are 4.0% above the 500,000-unit level a year ago. The median existing condo price was $176,700 in August, which is 3.3% higher than August 2011.
Regional home sales
Regionally, existing-home sales in the Northeast rose 8.6% to an annual pace of 630,000 in August and are also 8.6% above August 2011. The median price in the Northeast was $245,200, up 0.6% from a year ago.
Existing-home sales in the Midwest increased 7.7% in August to a level of 1.12 million and are 17.9% higher than a year ago. The median price in the Midwest was $152,400, up 7.8% from August 2011.
In the South, existing-home sales rose 7.3% to an annual pace of 1.90 million in August and are 11.1% above August 2011. The median price in the region was $160,100, up 6.5% from a year ago.
Existing-home sales in the West increased 8.3% to an annual level of 1.17 million in August but are unchanged from a year ago. With ongoing inventory shortages, the median price in the West was $242,000, which is 16.3% higher than August 2011.