Low Inventories and High Prices Suppressed Existing Home Sales in August

Existing-home sales fell 0.9% to a seasonally adjusted annual rate of 5.33 million in August, according to the National Association of Realtors (NAR). High prices and low inventories appear to have suppressed sales.

“It is very concerning to see that inventory conditions not only show no signs of improving but have actually worsened in recent months from their already suppressed levels a year ago,” says NAR Chief Economist Lawrence Yun. “While recent data from the U.S. Census Bureau shows that household incomes rose strongly last year, home prices are still outpacing incomes in many metro areas because of the persistent shortage of new and existing homes for sale.”

Total housing inventory fell 3.3% to 2.04 million homes available for sales, while the median existing-home price moved up 5.1% to $240,200.

Year-over-year sales were 0.8% higher. The annual sales rate rose 6.1% in the Northeast, but fell 0.8% in the Midwest, 2.7% in the South and 1.6% in the West.

Distressed sales comprised 5% of sales in August, the lowest share since the NAR began tracking them in 2008. Four percent of August sales were foreclosures and 1% were short sales. On average, foreclosures and short sales sold for discounts of 12% and 14% respectively.

Read the NAR release.