After a brief bump in July, existing home sales were back down in August — but could have a more robust future close at hand.
Existing home sales dipped 2.5 percent from the preceding month, according to a report from the National Association of Realtors. The seasonally adjusted annual rate of existing home sales in August was 3.86 million.
Year-over-year, sales fell 4.2 percent. That’s a deeper reduction than the 2.5 percent annual drop recorded in July.
Despite the decrease in existing home sales, NAR chief economist Lawrence Yun said that “lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months.”
As of Sept. 12, the 30-year fixed-rate average mortgage was 6.2 percent, down nearly a full point from a year earlier. Rates could be in for a ride after the Federal Reserve cut interest rates by 50 basis points on Wednesday.
The median sale price of existing homes last month rose 3.1 percent year-over-year to $416,700, the 14th consecutive month of annual increases recorded by NAR. That median represented a small decrease from July. All four regions tracked reported annual price gains.
All-cash sales accounted for 26 percent of purchases last month, down from 27 percent in both the previous month and year.
Three of the four regions recorded month-to-month gains in home sales; the Midwest was the exception, as sales held steady there. Sales decreased on an annual basis in every region except the Northeast, where they matched last year’s levels.
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To Yun’s point, for-sale inventory is on the rise. At the end of last month, the for-sale inventory was 1.35 million units, up only slightly from July, but nearly 23 percent year-over-year.
Unsold inventory was at a 4.2-month supply at last month’s sales pace, an increase from both the previous month and previous year.