The National Association of Realtors (NAR) reports that the number of U.S. home sales is higher than it has been in years. The data for August show completed transactions are at a six-and-a-half year high and that median home prices are also on the rise. NAR analysts say that a peak may be on the horizon, though, as higher mortgage interest rates and limited supply threatens to slow the pace of the recovery. For now, though, sales are up in nearly every kind of market including single-family homes and existing condos and co-ops. For more on this continue reading the following article from Property Wire.
Existing home sales in the United States increased in August and reached the highest level in six and a half years, according to the latest data from the National Association of Realtors.
The association’s report also shows that median home prices have experienced nine consecutive months of double digit year on year increases.
Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 1.7% to a seasonally adjusted annual rate of 5.48 million in August from 5.39 million in July, and are 13.2% higher than the 4.84 million unit level in August 2012.
Sales are at the highest pace since February 2007, when they hit 5.79 million, and have remained above year ago levels for the past 26 months.
Lawrence Yun, NAR chief economist, said the market may be experiencing a temporary peak. ‘Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,’ he explained.
‘Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase,’ he added.
Total housing inventory at the end of August increased 0.4% to 2.25 million existing homes available for sale, which represents a 4.9 month supply at the current sales pace, down from a five month supply in July. Unsold inventory is 6.3% below a year ago when there was a six month supply.
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‘Limited inventory in some areas means multiple bidding remains a factor. Some 17% of all homes sold above the asking price in August, although 63% sold below list price,’ said Yun.
There were large declines in inventory from a year ago in Naples, Florida, where it was down 23.5% , the Detroit area was down 23.3% and the greater Boston area down 20.7%.
Distressed homes, including foreclosures and short sales, accounted for 12% of August sales, down from 15% in July, and is the lowest share since monthly tracking began in October 2008. They were 23% in August 2012. Ongoing declines in the share of distressed sales are responsible for some of the growth in median price, according to Yun.
Some 8% of August sales were foreclosures and 4% were short sales. Foreclosures sold for an average discount of 16% below market value in August, and short sales were discounted 12%.
Rising home values will encourage more people to sell, according to NAR president Gary Thomas. ‘As the equity position of most home owners continues to improve, some who have been on the sidelines will list their home for sale,’ he said.
‘Most of those owners also will be buying another home, but higher levels of new home construction going into 2014, combined with some reduction in demand from less favorable affordability conditions, will help to moderate price growth to more sustainable levels,’ he added.
The median time on market for all homes was 43 days in August, little changed from 42 days in July, but is much faster than the 70 days on market in August 2012. Short sales were on the market for a median of 98 days, while foreclosures typically sold in 52, days and non-distressed homes took 41 days. Some 43% of homes sold in August were on the market for less than a month. The data also shows that first time buyers accounted for 28% of purchases in August, down from 29% in July and 31% in August 2012.
All cash sales comprised 32% of transactions in August, up from 31% in July and 27% in August 2012. Individual investors, who account for many cash sales, purchased 17% of homes in August, compared with 16% in July and 18% in August 2012. Last month, three out of four investors paid cash.
Single family home sales rose 1.7% to a seasonally adjusted annual rate of 4.84 million in August from 4.76 million in July, and are 12.8% above the 4.29 million unit pace in August 2012. The median existing single family home price was $212,200 in August, which is 14.4% higher than a year ago.
Existing condominium and co-op sales rose 1.6% to an annual rate of 640,000 units in August from 630,000 in July, and are 16.4% above the 550,000-unit level a year ago. The median existing condo price was $211,700 in August, up 17.7% from August 2012.
Regionally, existing home sales in the Northeast were unchanged at an annual rate of 710,000 in August but are 12.7% above August 2012. The median price in the Northeast was $268,800, up 7.6% from a year ago.
Existing home sales in the Midwest increased 3.1% in August to a pace of 1.32 million, and are 18.9% higher than a year ago. The median price in the Midwest was $166,100, which is 10% above August 2012.
In the South, existing home sales rose 3.8% to an annual level of 2.19 million in August and are 13.5% above August 2012. The median price in the South was $181,000, up 14.6% from a year ago.
Existing home sales in the West declined 2.3% to a pace of 1.26 million in August but are 7.7% higher than a year ago. With the tightest regional inventory conditions, the median price in the West rose to $287,500, which is 18.8% above August 2012.
This article was republished with permission from Property Wire.