Home prices continued to rise in August as existing home sales declined

Washington DC

Home prices continued to rise in August, even as home sales declined, according to a monthly report from the National, driven by low inventory of homes for sale and extremely high mortgage rates. The high rates drove potential buyers out of the market. Realtors Association.

The median price of existing homes – which includes single-family homes, townhomes, condominiums and cooperatives – was $407,100 last month. That’s up 3.9% from a year ago when the median home price was $391,700. The NAR report found that prices rose in all four regions of the country, the Northeast, Midwest, South and West.

Prices also rose in July, a month earlier, reversing a five-month decline year-on-year. The average price in August was the highest price of any August on record and the fourth highest price of any month. August marked the third consecutive month that the average sales price exceeded $400,000.

After surging during the pandemic, home prices cooled for several months.

“Home prices continue to rise despite lower home sales,” NAR chief economist Lawrence Yun said in a statement. “Supply needs to essentially double to moderate home price gains.”

The exceptionally low level of homes for sale is keeping prices high as buyers compete for the few homes available in each local market.

The inventory of unsold existing homes at the end of August decreased 0.9% from the previous month to 1.1 million units, or the equivalent of 3.3 months’ supply at the current monthly sales pace.

With few homes on the market, home prices climbing and mortgage rates remaining high throughout the summer, the number of completed sales in August, which likely went into contract in June or July, declined from the previous month.

Sales of existing homes fell short of expectations and declined 0.7% from July to August to a seasonally adjusted annual rate of 4.04 million units. Analysts were expecting growth of 1.5% and a sales pace of 4.10 million.

Annualized, August sales were down 15.3% from a year earlier when sales pace stood at 4.77 million units.

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