Existing-home sales reach highest level seen in 14 years
Marking the third consecutive month of growth, August’s existing-home sales climbed 2.4 percent to a seasonally adjusted rate of 6.00 million. From a year-over-year standpoint, sales are 10.5 percent higher than last year. This is the highest level recorded since December of 2006.
“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” says Lawrence Yun, National Association of Realtors® (NAR’s) chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3 percent and with continued job recovery.”
Demand up, supply down
With home prices rising in every region, August’s median existing-home price came in 11.4 percent higher than last year, marking the 102nd straight month of year-over-year gains. Inventory, on the other hand, continues to decline, with August’s total housing inventory down 0.7 percent from July and 18.6 percent from last year.
Yun explains this ongoing issue for the past few years was further exacerbated by the surge in lumber prices resulting from California wildfires. “Over recent months, we have seen lumber prices surge dramatically,” says Yun. “This has already led to an increase in the cost of multifamily housing and an even higher increase for single-family homes.”
Yun expects the need for housing to continue to grow, particularly in areas that are becoming increasingly attractive to those working remotely. To combat this supply and demand imbalance, Yun points to construction. “Housing demand is robust, but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” he warns. “To assure broad gains in homeownership, more new homes need to be constructed.”
A key factor in economic growth
NAR President Vince Malta notes the importance of real estate in the nation’s economic recovery. “The past few months have shown how valuable real estate is in the country, both to our nation’s economy and to individuals who have been given an opportunity to rethink their location and redesign their lifestyle,” he says. “NAR maintains robust advocacy efforts on behalf of our 1.4 million Realtors®— including hundreds of thousands of housing providers—to ensure this industry can continue to lead in America’s economic recovery.”
Growth across the board
Both existing-home sales and median home prices grew in all four major regions:
August’s existing-home sales:
- Northeast: Up 13.8% to an annual rate of 740,000—5.7% higher than last year
- Midwest: Up 1.4% to an annual rate of 1.41 million—9.3% higher than last year
- South: Up 0.8% to an annual rate of 2.60 million—13.0% higher than last year
- West: Up 0.8% to an annual rate of 1.25 million—9.6% higher than last year
August’s median home prices:
- Northeast: $349,500—10.4% higher than last year
- Midwest: $246,300—10.7% higher than last year
- South: $269,200—12.3% higher than last year
- West: $456,100—11.8% higher than last year
Source: https://www.nar.realtor/newsroom/existing-home-sales-hit-highest-level-since-december-2006