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Existing-home sales decreased in August, tallying the seventh-consecutive month of declines, according to data released Tuesday by the National Association of Realtors.
Sales of existing homes slipped a modest 0.4 percent between July and August to a seasonally adjusted rate of 4.80 million, 19.9 percent lower than the same period last year, according to NAR existing-home data.
At the same time, the median sale price of an existing U.S. home decreased month over month to $389,500, down from July when it sat at $403,800 and the first time to fall below $400,000 since April.
The latest median sale price, however, increased from August 2021 when it clocked in at just $361,500 — a 7.7 percent annual increase representing the slowest year-over-year uptick since June 2020, according to a statement from personal finance website NerdWallet.
The seven months of decreasing sales have come amid elevated mortgage rates, which surpassed 6 percent last week, and have lead some economists to declare that the country is in a housing recession.
“The housing sector is the most sensitive to and experiences the most immediate impacts from the Federal Reserve’s interest rate policy changes,” NAR Chief Economist Lawrence Yun said in a statement. “The softness in home sales reflects this year’s escalating mortgage rates. Nonetheless, homeowners are doing well with near nonexistent distressed property sales and home prices still higher than a year ago.”
After charting increases for five straight months, total housing inventory marked a decrease in August, falling 1.5 percent from July to 1,280,000 units or a 3.2 month supply at the current sales rate, the same level they were at in August 2021. Many homeowners are likely reluctant to sell in the current high-rate environment, as evidenced by the 13 percent annual reduction in newly-listed homes, according to data from Realtor.com.
“Inventory will remain tight in the coming months and even for the next couple of years,” Yun said. “Some homeowners are unwilling to trade up or trade down after locking in historically low mortgage rates in recent years, increasing the need for more new-home construction to boost supply.”
Decreasing sales were not universal across the country, as the Northeast saw a 1.6 percent bump in sales month over month while remaining down 13.7 percent from August 2021, and sales in the West grew by 1.1 percent from July but were down 29 percent from 2021 levels.
“The home buyers and sellers that drive the housing market have taken their foot off the gas in response to changing conditions – but they haven’t stopped entirely, by any means, and in areas of the Northeast and West have actually re-accelerated from a month ago,” Compass President of National Brokerage Operations Neda Navab said in a statement. “The ongoing uncertainty and volatility posed by rising interest rates, high inflation and limited inventory have combined to lower the housing market’s speed limit, but today’s data proves there is still some gas in the tank. “