Sales of previously owned homes fell 2.7 percent from July to August, ending a run of four consecutive months of increases, while the inventory of homes for sale continued to shrink, the National Association of Realtors said today.
Resale homes, including single-family homes, townhomes, condos and co-ops, changed hands at a seasonally adjusted annual rate of 5.1 million units in August, off the pace of 5.24 million in July but up 3.4 percent from a year ago.
At that pace, the 3.62 million homes on the market at the end of August represented 8.5 months of supply, down from 9.3 months in July. Many experts consider a six-month supply of homes for sale good balance between supply and demand. The inventory of homes for sale was down 10.8 percent from July and 16.4 percent from a year ago.
Some of the decline in closed sales appears to be the result of a rising number of contracts entering the system as the Nov. 30 deadline for claiming the first-time homebuyer tax credit approaches, said Lawrence Yun, NAR's chief economist, in a press release. The resulting backlog has contributed to a longer closing process, Yun said.
Nevertheless, the decline demonstrates "we can't take a housing rebound for granted," Yun said in restating NAR's call for an extension of the tax credit.
First-time buyers purchased 30 percent of homes in August, and distressed homes accounted for 31 percent of transactions, NAR said. Both statistics were unchanged from July.
Distressed-home sales continue to distort the median price, NAR said, which at $177,000 was down 12.5 percent from a year ago.
The median existing single-family home price was $177,500 in August, down 12.1 percent from a year ago, while the median condo price was down 15.7 percent year-over-year, to $179,300.
Single-family home sales fell 2.8 percent from July to August to a seasonally adjusted annual rate of 4.48 million, but are up 2.5 percent from a year ago. Resale condo and co-op sales slipped 1.6 percent from July to August to a seasonally adjusted annual rate of 620,000, a 10.1 percent increase from a year ago.
Sales of existing homes were down in all four regions tracked by NAR from July to August, with the Midwest seeing the biggest decline (-6.6 percent) followed by the South (-3.1 percent) West (-2.7 percent) and Northeast (-2.2 percent).