Existing-home sales fall 1.7 percent in August

Existing-home sales fall 1.7 percent in August
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Existing-home sales fell in August for the fourth time in five months as a lack of housing supply weighs on purchases.

Sales of previously owned homes, which are completed transactions that include single-family homes and condominiums, dropped 1.7 percent to a seasonally adjusted annual rate of 5.35 million last month from 5.44 million in July, the National Association of Realtors reported on Wednesday. 

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Last month's sales pace is 0.2 percent above last August but is the lowest since then.

"Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales,” said Lawrence Yun, chief economist for the National Association of Realtors.

“What’s ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it’s putting on prices in several parts of the country," Yun said.

Total housing inventory at the end of August declined 2.1 percent to 1.88 million existing homes available for sale, and is now 6.5 percent lower than a year ago. Inventory levels have fallen year-over-year for 27 consecutive months.

Unsold inventory is at a 4.2-month supply at the current sales pace, which is a drop from 4.5 months a year ago.

Meanwhile, the median existing-home price for all housing types in August was $253,500, up 5.6 percent from August 2016 ($240,000).

Mortgage rates for a 30-year-fixed loan fell to 3.88 percent in August from 3.97 percent in July and is the lowest since November.

The report shows that first-time buyers represented 31 percent of sales in August, which is a drop from 33 percent in July and is the lowest level since last August. 

All-cash sales, which are made mostly by investors, were 20 percent of transactions in August, up from 19 percent in July but down from 22 percent a year ago. 

Distressed sales — foreclosures and short sales — continued to improve, representing 4 percent of sales in August, down from 5 percent in July and a year ago. 

Single-family home sales decreased 2.1 percent while condominium and co-op sales climbed 1.7 percent but are still 1.6 percent below a year ago.

Regionally, sales declines in the South and West outpaced gains in the Northeast and Midwest.

“Some of the South region’s decline in closings can be attributed to the devastation Hurricane Harvey caused to the greater Houston area," Yun said.

August existing-home sales in the Northeast jumped 10.8 percent while sales in the Midwest rose 2.4 percent.

Sales in the South dropped 5.7 percent while sales in the West fell 4.8 percent.