Existing Home Sales Stall Unexpectedly

Existing home sales fell 4.8 percent in August to a seasonally adjusted annual rate of 5.31 million, according to the National Association of Realtors (NAR), from a downwardly revised 5.58 million in July. August’s decline followed three consecutive months of gains. Despite the monthly decline, existing home sales have risen year-over-year for the last 11 months.

Total housing inventory rose 1.3 percent to 2.29 million existing homes available for sale, but fell 1.7 percent from a year ago. There was a 5.2 months supply of unsold inventory in August, up from 4.9 months in July.

“Sales activity was down in many parts of the country last month – especially in the South and West – as the persistent summer theme of tight inventory levels likely deterred some buyers,” said NAR Chief Economist Lawrence Yun. “With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall.”

The percent share of first time home buyers rose to 32 percent, matching May’s figure for the highest share of the year. The share of first time buyers was 29 percent a year ago.

Existing home sales declined in three of the four regions, declining 1.5 percent in the Midwest, 6.6 percent in the South, and 7.8 percent in the West. The rate of sales was unchanged in the Northeast at an annual rate of 700,000.

Distressed sales remained at 7 percent for the second month, the lowest rate since October 2008. Foreclosures comprised 5 percent of distressed sales, while 2 percent were short sales.

Read the NAR release.