The Real Deal New York

Across US, rising home prices and falling inventory led to fewer August sales: report

National Association of Realtors' monthly report also showed existing homes prices rose
By Dennis Lynch | September 20, 2018 01:31PM

NAR Chief Economist Lawrence Yun and a single family home (Credit: National Association of Realtors and iStock)

Rising home prices and dwindling inventory across the U.S. accounted for an August slowdown in the overall number of home sales.

Existing home sales were down 1.5 percent last month, compared to the same period last year, according to a monthly report released Thursday by the National Association of Realtors.

Meanwhile, prices of existing homes rose 4.6 percent last month, the report showed.

Still, the downward trend in sales — which has been recorded for the last months — may be turning around. The seasonally adjusted rate of monthly sales remained flat from July to August, at 5.3 million homes. That broke a four-month-long slide.

NAR chief economist Lawrence Yun said strong sales in the Northeast and Midwest helped balance out slides in the western and southeastern U.S.

The top end of the market was the strongest of any segment in August.

Year over year, sales of home priced above $250,000 rose, while sales for homes below that price fell. Sales above $1 million jumped 11.8 percent, more than any other segment. Sales of homes between $750,000 and $1 million were up by 8.6 percent.

Inventory was up slightly from a year ago. More than half of all homes sold across the U.S. took less than one month from the time they were listed, suggesting that the appetite among buyers remains high. Low inventory at pricing below $250,000 could be contributing to the drop in sales below that price, according to NAR.

Rising interest rates could be worsening the situation. Mortgage rates started to rise earlier this year, prompting some buyers to scramble to lock in a rate, and prompting others to wait out the market until pricing comes back down, market pros have said.

Home sales could dip again in September, NAR reported.