Sales of existing homes remained steady from July to August, ending four straight months of decline, according to the latest data from the National Association of Realtors. Home sales, meanwhile, dropped 1.5 percent year-over-year, the sixth straight month of such declines.
Nationwide, the median existing-home price for all housing types rose 4.6 percent year-over-year to $ 264,800, the 78th straight month of annual gains, according to the Existing Homes Sales report, released Thursday.
“Strong gains in the Northeast and a moderate uptick in the Midwest helped to balance out any losses in the South and West, halting months of downward momentum,” NAR Chief Economist Lawrence Yun said. “With inventory stabilizing and modestly rising, buyers appear ready to step back into the market.”
Ruben Gonzalez, the chief economist at Keller Williams, believes declining sales numbers in certain markets is partly due to market uncertainty.
“We are probably seeing a reaction to the uncertainty around how sustainable recent price increase will be in the near future,” said Gonzalez. “Nationally, we expect sales to continue to track slightly below last year’s levels as inventory starts to move upward.”
“Economic fundamentals remain positive for housing with incomes showing signs of improvement and unemployment remaining low,” Gonzalez added. “However, in markets that have seen the most aggressive price growth, there may now be some disconnect between buyers and sellers on pricing and, coupled with mortgage rates, we are seeing some impact on demand.”
With home sales dropping, inventory is trending upwards, especially on the West Coast.
“Our data indicates an increase in inventory of 30 percent in Seattle, and we are seeing near double-digit increases in Portland and cities outlying Los Angeles and the Bay Area as well,” said Gonzalez.
Properties typically stayed on the market for 29 days – up from 27 in July and down from 30 in August 2017 – and 52 percent of homes sold were on the market for less than a month.
“While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand,” said Yun. “Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory – especially moderately priced, entry-level homes – would propel sales.”
Regionally, existing home sales increased 7.6 percent in the Northeast and jumped 2.4 percent in the Midwest. Existing home sales in the South and West declined 0.4 percent and 5.9 percent, respectively.