Washington, DC – September 23, 2010 – Existing-home sales rose in August following a big correction in July, according to the National Association of Realtors®.
Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 4.13 million in August from an upwardly revised 3.84 million in July, but remain 19.0 percent below the 5.10 million-unit pace in August 2009.
Lawrence Yun, NAR chief economist, said home sales still remain subpar. “The housing market is trying to recover on its own power without the home buyer tax credit. Despite very attractive affordability conditions, a housing market recovery will likely be slow and gradual because of lingering economic uncertainty,” Yun said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.43 percent in August from 4.56 percent in July; the rate was 5.19 percent in August 2009.
Yun added, “Home values have shown stabilizing trends over the past year, even as the economy shed millions of jobs, because of the home buyer tax credit stimulus. Now that the economy is adding some jobs, the housing market needs to steadily improve and eventually stand on its own.”
The national median existing-home price2 for all housing types was $178,600 in August, up 0.8 percent from a year ago. Distressed homes3 rose to 34 percent of sales in August from 32 percent in July; they were 31 percent in August 2009.
NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said consumers have been getting mixed signals about the housing market. “People understand the good affordability conditions with stable home prices in most areas, but they’re concerned about the economy and speculation on Wall Street,” she said. “We need to stick with the facts about the long-term value of homeownership and avoid unrealistic assessments. Tight credit and slow short sales are ongoing problems – expediting short sales will help the market to recover more quickly.”
Total housing inventory at the end of August slipped 0.6 percent to 3.98 million existing homes available for sale, which represents an 11.6-month supply4 at the current sales pace, down from a 12.5-month supply in July.
A parallel NAR practitioner survey shows first-time buyers purchased 31 percent of homes in August, down from 38 percent in July. Investors rose to a 21 percent market share in August from 19 percent in July; the balance of purchases were by repeat buyers. All-cash sales slipped to 28 percent in August from 30 percent in July.
Single-family home sales rose 7.4 percent to a seasonally adjusted annual rate of 3.62 million in August from a level of 3.37 million in July, but are 19.2 percent lower than the 4.48 million level in August 2009. The median existing single-family home price was $179,300 in August, up 1.2 percent from a year ago.
Single-family median existing-home prices were higher in 10 out of 19 metropolitan statistical areas reported in August from a year ago (the price in one of 20 tracked markets was not available). Existing single-family home sales were down in all 20 metro areas from August 2009.
Existing condominium and co-op sales increased 8.5 percent to a seasonally adjusted annual rate of 510,000 in August from 470,000 in July, but are 17.1 percent below the 615,000-unit pace in August 2009. The median existing condo price5 was $174,000 in August, which is 2.8 percent below a year ago.
Regionally, existing-home sales in the Northeast rose 7.9 percent to an annual level of 680,000 in August but are 24.4 percent below August 2009. The median price in the Northeast was $260,300, up 7.6 percent from a year ago.
Existing-home sales in the Midwest increased 5.0 percent in August to a pace of 840,000 but are 26.3 percent below a year ago. The median price in the Midwest was $149,600, up 0.4 percent from August 2009.
In the South, existing-home sales rose 5.2 percent to an annual level of 1.62 million in August but are 13.4 percent below August 2009. The median price in the South was $155,000, down 1.5 percent from a year ago.
Existing-home sales in the West jumped 13.8 percent to an annual pace of 990,000 in August but are 16.1 percent lower than August 2009. The median price in the West was $214,700, which is 2.5 percent below a year ago.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
2The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
3Distressed sales, first-time buyer and investor data are from a survey for the Realtors® Confidence Index, scheduled to be posted October 4.
4Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, condos were measured quarterly while single-family sales accounted for more than 90 percent of transactions).
5Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Copyright National Association of REALTORS®, Reprinted from REALTOR.org with permission.