Published Date 9/25/2023
The theory — no, law — of supply and demand is alive and well these days. The National Association of Realtors’ chief economist, Lawrence Yun puts it this way: “Housing supply needs to essentially double to moderate home price gains.” Low housing supply continues to push up the price of a home, while home buyers are showing they are willing to pay more. Realtor Magazine’s Melissa Pittman Tracy reports the median existing-home price for all housing types in August reached $407,100 nationwide, a nearly 4% increase compared to a year earlier, marking the third consecutive month for median sales prices to surpass $400,000. And this is happening everywhere — not in just large urban areas and their popular suburbs.
Inventory remained sparse — by the end of August, down about 14% compared to last year’s levels, which were already historically low, according to NAR’s report. “Unsold inventory is at a 3.3-month supply at the current sales pace; economists often say a five- to six-month pace reflects a more balanced market,” says Tracey.
Those precious few homes that are on the market tend to sell quickly, as 72% of homes sold in August were on the market for less than a month. Properties last month typically remain on the market for a short 20 days.
Still, home sales are softening due to the limited supply. NAR reported that total existing-home sales—which reflect completed transactions for single-family homes, townhomes, condos and co-ops—dropped slightly by 0.7% in August compared to July. Sales are down 15.3% compared to last year’s brisk pace.
Yun explains, “Home sales have been stable for several months, neither rising nor falling in any meaningful way. Mortgage rate changes will have a big impact over the short run, while job gains will have a steady, positive impact over the long run. The South had a lighter decline in sales from a year ago due to greater regional job growth since coming out of the pandemic lockdown.”
With higher mortgage rates not moderating quite yet, all-cash sales have been rising. NAR’s report shows that all-cash sales accounted for 27% of transactions in August, up from 24% a year earlier. Individual investors and second-home buyers tend to make up the biggest bulk of cash sales, having purchased 16% of homes in August.
Tracey offers a closer look existing-home sales across the country in August, according to NAR’s latest report:
Northeast: Sales reached an annual rate of 480,000, unchanged from July but down 22.6% compared to a year earlier. Median price: $465,700, up 5.8% from one year ago.
Midwest: Existing-home sales rose by 1% compared to the previous month, reaching an annual rate of 970,000. Sales are down 16.4% from the prior year. Median price: $305,300, up 6.8% from August 2022.
South: Sales fell 1.1% compared to July, reaching an annual rate of 1.84 million. Sales fell 12.4% from one year ago. Median price: $366,100, up 3.2% from a year earlier.
West: Sales dropped 2.6% compared to the previous month, reaching an annual rate of 750,000. Sales are down 15.7% from the prior year. Median price: $609,300, up 1% from August 2022.
Few things are more precious than home sweet home, however, so you can bet that when all this begins to normalize, it will be front-page news.
RealtorMag, TBWS
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
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