U.S. Existing-Home Sales Rose in August

Marco Green
September 21, 2019

USA home sales rose 1.3 percent in August to the highest level in 17 months, as mortgage rates near historic lows have spurred a rush of home-buying.

A decline in mortgage rates throughout much of the summer has helped buyers.

"Having the mortgage rates low for several consecutive months, this is enticing buyers back into the market", said NAR Chief Economist Lawrence Yun. The desire to take advantage of these promising conditions is leading more buyers to the market.

The median existing-home price for all housing types in August was $278,200, up 4.7% from August 2018 ($265,600). On a monthly basis, sales jumped 7.6% in the Northeast and there was an increase of 3.1% in the Midwest.

A report Wednesday showed new home construction surged in August to the fastest pace of the expansion as homebuilders started more apartment projects and single-family houses. There was a 4.1-month supply of homes on the market at the end of August at the current sales pace.

Properties typically remained on the market for 31 days in August, up from 29 days in July and in August of 2018.

U.S. Existing-Home Sales Rose in August
U.S. Existing-Home Sales Rose in August

Last week, 30-year fixed mortgage rates averaged 3.56%, down from close to 5% in November, according to Freddie Mac. The average commitment rate across all of 2018 was 4.54%. For all of 2018, first-time buyers accounted for 33% of sales. All-cash sales accounted for 19% of transactions in August, about equal to July's percentage and moderately down from August 2018 (19% and 20%, respectively). That's a 2.6% decrease from 1.91 million in August 2018.

Home buyers have been a beneficiary from the recent economic uncertainty, as interest rates have fallen in response to slower global growth and President Trump's tariffs against China.

Sales of previously owned US homes rose in August to the highest in more than a year amid lower borrowing costs and sustained income gains, adding to signs the housing market is breaking out of a slump. Sales have increased 2.6 percent from a year ago. Median home prices rose from a year ago, except in the Northeast, with the Midwest showing the highest price increase. Sales of multifamily homes were roughly flat year over year at a seasonally adjusted annual rate of 590,000 units. Sales of homes worth less than $250,000 have fallen in the past year, while sales of home priced between $250,000 and $1 million have risen. They were up 2.6% from a year ago.

Existing home sales closed 2018 with a seasonally adjusted December total of 4.99 million in 2018. The median price in the South was $240,300, up 5.4% from a year ago.

Existing home sales in the West dropped by 3.4% to an annual rate of 1.14 million in August and are now up 1.8% compared with August 2018 totals. The median price in the West was $415,900, up 5.7% compared with the August 2018 median.

Other reports by Click Lancashire

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