Sales of existing homes fell 2.0% to a seasonally adjusted annual rate of 5.88 million units last month, the National Association of Realtors said on Wednesday. Sales declined in all four regions. Economists polled by Reuters had predicted that sales would fall to a rate of 5.89 million units in August.
Home resales, which account for the bulk of US home sales, fell 1.5% year-on-year.
The housing market boomed in the early days of the COVID-19 pandemic due to an exodus from cities, with people working from home and taking online classes, which fueled the demand for larger homes in the suburbs. and other low density areas. Demand, which was concentrated in the single-family home market segment, far exceeded supply.
Due to the high cost of building materials, land shortage and labor shortage, it is more difficult for builders to increase production. Government data released Tuesday showed single-family housing construction declined for the second consecutive month in August.
Although the wind of the pandemic is fading, demand for housing remains strong thanks to mortgage rates which have never been so low and rising wages due to the tightening of the labor market.
The median price of existing homes rose 14.9% from the previous year to reach $ 356,700 in August. The rate of increase is slowing, however, and the bidding wars subside. Sales remain concentrated in the upper price bracket of the market.
Last month, 1.29 million old homes were on the market, 13.4% less than a year ago. At the rate of August sales, it would take 2.6 months to draw on the current stock, compared to 3 months last year. A six to seven month supply is considered a healthy balance between supply and demand.
Economists do not think that a new real estate bubble is forming, because the acceleration is mainly due to a mismatch between supply and demand, rather than bad lending practices, which triggered the financial crisis. World 2008.
But rising prices are preventing some potential first-time buyers from entering the market. In August, properties were generally left on the market for 17 days, the same number of days as in July. Eighty-seven percent of homes sold last month had been on the market for less than a month.
First-time buyers represented 29% of sales, the lowest level since January 2019, against 30% in July and 33% a year ago. (Report by Lucia Mutikani; edited by Andrea Ricci).
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