Existing home sales increased 1.7% in August, and were up 13.2% from the same period a year ago, reaching the highest level since February 2007. The National Association of Realtors (NAR) reported that August 2013 total existing home sales were at a seasonally adjusted rate of 5.48 million units for combined single-family homes, townhomes, condominiums and co-ops. That compares to 5.39 million units in July, and 4.84 million units during the same period a year ago. The South and Midwest increased 3.8% and 3.1% respectively, while the Northeast remained flat and the West decreased 2.3% from last month. All regions were up from a year ago: 18.9% in the Midwest, 13.5% in the South, 12.7% in the Northeast and 7.7% in the West.
The August 2013 level of single-family existing home sales increased 1.7% from July to a seasonally adjusted 4.84 million sales, which is an increase of 12.8% from the same month a year ago. Seasonally adjusted condominium and co-op sales were up 1.6% in August to a seasonally adjusted 640,000 units, and were up 16.4% from the same period a year ago.
The total housing inventory at the end of August increased 0.4% from the previous month to 2.25 million existing homes for sale. At the current sales rate, the August 2013 inventory represents a 4.9-month supply compared to a 5.0-month supply in July, and a 6.0-month supply of homes a year ago. NAR also reported that the August median time on market for all homes was 43 days, up slightly from 42 days in July but down significantly from 70 days during the same month a year ago. NAR reported that 43% of all homes sold in August were on the market less than a month.
The share of distressed sales decreased in August to 12% of sales, the lowest level since NAR initiated monthly tracking in October 2008. The August distressed share was down from 15% in July, and down from 23% in June 2012. Distressed sales are defined as foreclosures and short sales sold at deep discounts.
The median sales price for existing homes, including single family homes, condos and townhomes, was $212,100 in August. This was a slight decline from $212,400 in July, but up 14.7% from $184,900 during the same period last year. The National Association of Realtors (NAR) reported that August was the eighteenth consecutive month of year-over-year price increase. The August median price also represented the strongest year-over-year increase since October 2005.
The median price for condominiums/co-ops increased from $208,100 in July to $211,700 in August. This also represented a 17.7% jump from the same period a year ago.
In August 2013, all cash sales were 32% of all transactions, compared to 31% in July, and 27% in August 2012. Investors accounted for 17% of August home sales, compared to 16% in July and 18% during the same month a year ago. First-time buyers accounted for 28% of August 2013 sales, down from 29% in July, and down from 31% during the same period a year ago.
NAR suggested that rising mortgage rates this summer, combined with tight mortgage credit standards, has begun to dampen housing affordability, especially for first-time buyers. As for constrained inventory, yesterday’s strong single-family starts report suggests that an improving supply is on the horizon, consistent with builder confidence levels reported this summer. Last month’s slight decrease in the Pending Home Sales Index was a signal that any increase in existing sales would be moderate. Yet to be determined is the impact of yesterday’s announcement by the Federal Reserve that they will not immediately begin tapering its aggressive printing of money.