Low Inventory Sparks Existing Home Sales

Julie C. Nichols General

MBA Newslink – Mike Sorohan

Existing home sales increased in August to their highest level in more than six years, while the median price shows nine consecutive months of double-digit year-over-year increases, the National Association of Realtors said yesterday. NAR said total existing-home sales rose by 1.7 percent to a seasonally adjusted annual rate of 5.48 million in August from 5.39 million in July, and were 13.2 percent higher than the 4.84 million-unit level a year ago. Sales are at the highest pace since February 2007, when they hit 5.79 million, and have remained above year-ago levels for the past 26 months.

The report said single-family home sales rose by 1.7 percent to 4.84 million in August from 4.76 million in July, and were 12.8 percent higher than the 4.29 million-unit pace a year ago. The median existing single-family home price was $212,200, 14.4 percent higher than a year ago. Existing condominium and co-op sales rose 1.6 percent to 640,000 units from 630,000 in July and were 16.4 percent above the 550,000-unit level a year ago. The median existing condo price was $211,700, up by 17.7 percent from a year ago.

NAR Chief Economist Lawrence Yun said the market may be experiencing a temporary peak. “Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,” he said. “Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.”

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