Existing-Home Sales Fell 0.9% in August, Following July Decline

Washington, DC, September 22, 2016— Total existing-home sales declined 0.9 percent to a seasonally adjusted annual rate of 5.33 million in August from a downwardly revised 5.38 million in July, according to the National Association of Realtors. After last month's decline, sales are at their second-lowest pace of 2016, but are still slightly higher (0.8%) than a year ago (5.29 million).

Existing-home sales eased up in August for the second consecutive month despite mortgage rates near record lows as higher home prices and not enough inventory for sale kept some would-be buyers at bay. Only the Northeast region saw a monthly increase in closings in August, where inventory is currently more adequate.

Lawrence Yun, NAR chief economist, says recent job growth is not yielding higher home sales. "Healthy labor markets in most the country should be creating a sustained demand for home purchases," he said. "However, there's no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn't picking up to tame price growth and replace what's being quickly sold."

Added Yun, "Hopes of a meaningful sales breakthrough as a result of this summer's historically low mortgage rates failed to materialize because supply and affordability restrictions continue to keep too many would-be buyers on the sidelines."

The median existing-home price for all housing types in August was $240,200, up 5.1% from August 2015 ($228,500). August's price increase marks the 54th consecutive month of year-over-year gains.

Total housing inventory at the end of August fell 3.3% to 2.04 million existing homes available for sale, and is now 10.1% lower than a year ago (2.27 million) and has declined year-over-year for 15 straight months. Unsold inventory is at a 4.6-month supply at the current sales pace, which is down from 4.7 months in July.

The share of first-time buyers was 31% in August, which is down from 32% both in July and a year ago. First-time buyers represented 30% of sales in all of 2015.