Existing home sales
continued on a roll for the third consecutive month, hitting the highest level
in August since December 2006.
The National Association of Realtors® (NAR) said
sales of pre-owned single-family houses, townhomes, condos, and cooperative
apartment were at a seasonally adjusted annual rate of 

The August numbers came on top of a 24.7 percent
rise the prior month and 20.7 percent growth in June. Since May, when the
market began to recover from its 3-month long pandemic related tailspin, the
pace of sales has risen by 2.2 million units.

Analysts had been bullish in their forecasts for
the August numbers and didn’t miss by much. Those polled by Econoday had
expected sales in the range of 5.56 million to 6.44 million with a consensus of
5.97 million units.

“Home sales continue to amaze, and there are plenty of buyers in the
pipeline ready to enter the market
,” said Lawrence Yun, 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.”

Sales of single-family homes was at a seasonally adjusted annual rate of
5.37 million in August, up 1.7 percent from 5.28 million in July, and 11.0
percent from one year ago. Existing condominium and co-op sales were recorded
at a seasonally adjusted annual rate of 630,000 units representing growth of 8.6
percent and 6.8 percent from the two earlier periods.

The median existing-home price for all housing types  in August was $310,600, up 11.4 percent from the
August 2019 median of $278,800 and marked 102 straight months of year-over-year
gains. The median existing single-family home price was $315,000, 11.7 percent higher
on an annual basis while the median existing condo price rose 7.8 percent to $273,300.

There were 1.49 million units available for sale at
the end of August, down 0.7 percent from July and 18.6 percent from one year
ago (1.83 million). Unsold
inventory sits at a 3.0-month supply at the current sales pace compared to 3.1
months in July and 4.0-months a year earlier.

Scarce
inventory has been problematic for the past few years, according to Yun, an
issue he says has worsened in the past month due to the dramatic surge in
lumber prices and the dearth of lumber resulting from California wildfires.

“Over recent months, we have seen lumber prices surge dramatically,” Yun
said. “This has already led to an increase in the cost of multifamily housing
and an even higher increase for single-family homes.”

Yun says the need for housing will grow even further,
especially in areas that are attractive to those who can work from home. An
August report from NAR noted that remote work opportunities are likely to
become a growing part of the nation’s workforce culture. Yun believes this
reality will endure, even after a coronavirus vaccine is available.

“Housing
demand is robust but supply is not, and this imbalance will inevitably harm
affordability and hinder ownership opportunities,” he said. “To assure broad
gains in homeownership, more new homes need to be constructed.”

Properties typically remained on the market for 22 days in
August, seasonally equal to the number of days in July and down from 31 days in
August 2019. Sixty-nine percent of homes sold
in August 2020 were on the market for less than a month.

First-time
buyers accounted for 33 percent of sales during the month. All-cash sales
accounted for 18 percent of transactions in August, up from 16 percent in July but
1 percentage point less than in the previous August. Individual investors or second-home buyers, who account for many of
those sales, purchased 14 percent of homes in August, little changed from the
earlier periods. Distressed sales – foreclosures and
short sales – represented less than 

“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,” said NAR President Vince Malta. “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.”

NAR said
home sales have climbed month-over-month for three straight months in all four
major U.S. regions and median home prices grew by double-digits annually in each
as well.  Sales in the Northeast jumped
13.8 percent to an annual rate of 740,000, a 5.7 percent increase from a year
ago. The median price in the Northeast was $349,500, up 10.4 percent from
August 2019.

The
Midwest saw sales increase 1.4 percent from July and 9.3 percent from a year
earlier to an annual rate of 1,410,000 units. The median price rose 10.7
percent to $246,300.

Existing-home
sales in the South were at an annual rate of 2.60 million units, a gain of 0.8
percent from July and 13.0 percent from a year earlier. There was 12.3 percent annual
growth in the median home price to $269,200.

Sales
in the West inched 0.8 percent higher to 1,250,000 annual units, a 9.6 percent
increase from July. The median price in the West was $456,100, up 11.8 percent
year-over-year.

By Jann Swanson , dated 2020-09-22 11:26:50

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Courtesy of Mortgage News Daily

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