August Sees 15% Annual Decline in U.S. Home Sales

U.S. Existing-Home Sales See Moderate Decline in August 2023

The latest data from the National Association of Realtors reveals a modest downturn in existing-home sales during August 2023. Across the nation’s four major regions, sales experienced improvement in the Midwest, remained steady in the Northeast, and saw declines in the South and West. Notably, all regions reported year-over-year decreases in sales figures.

In specific numbers, total existing-home sales, which encompass completed transactions involving single-family homes, townhomes, condominiums, and co-ops, slipped by 0.7% from July 2023 to a seasonally adjusted annual rate of 4.04 million units in August 2023. This marked a significant 15.3% decline compared to August 2022’s figure of 4.77 million units.

NAR’s Chief Economist, Lawrence Yun, commented on the trend, noting, “Home sales have been stable for several months, neither rising nor falling in any meaningful way.” He emphasized the role of mortgage rate fluctuations in the short term and highlighted the positive impact of sustained job growth in the long term.

Yun also pointed out that the South experienced a milder sales decline compared to other regions, attributing it to robust regional job expansion post-pandemic lockdowns.

The total housing inventory by the end of August stood at 1.1 million units, indicating a 0.9% decrease from July and a notable 14.1% drop from the previous year (1.28 million units). The unsold inventory, measured by months of supply at the current sales pace, remained constant at a 3.3-month supply, the same as July but slightly up from 3.2 months in August 2022.

Despite the decline in sales, the median existing-home price for all housing types saw a steady increase, reaching $407,100 in August 2023, reflecting a 3.9% rise from August 2022’s median price of $391,700. This upward trend in prices persisted across all four U.S. regions.

Yun emphasized the pressing need for a significant increase in supply to mitigate further escalation in home prices, stating, “Home prices continue to march higher despite lower home sales. Supply needs to essentially double to moderate home price gains.”

Realtors Confidence Index: Key Insights for August 2023

The latest data from the Realtors Confidence Index sheds light on key trends in the real estate market for August 2023. Here’s a detailed breakdown of the findings:

  • Market Duration: Properties remained on the market for an average of 20 days in August, unchanged from July but up from 16 days compared to August 2022. Notably, a significant 72% of homes sold during the month were on the market for less than a month, indicating robust demand and swift transactions.
  • First-Time Buyers: First-time buyers accounted for 29% of sales in August, slightly down from 30% in July but consistent with the figure recorded in August 2022. This data aligns with NAR’s 2022 Profile of Home Buyers and Sellers, which reported an annual first-time buyer share of 26%, marking the lowest since NAR began tracking the data.
  • All-Cash Transactions: All-cash sales comprised 27% of transactions in August, showing a slight increase from 26% in July and 24% in August 2022. These transactions often involve individual investors or second-home buyers, who maintained a consistent share of 16% of home purchases in August, identical to both July and the previous year.
  • Distressed Sales: Distressed sales, including foreclosures and short sales, represented a minimal 1% of total sales in August. This figure remained unchanged from the previous month and the same period last year, indicating stability in this segment of the market.

The Realtors Confidence Index offers valuable insights into the dynamics of the real estate market, providing stakeholders with essential data to navigate current trends and make informed decisions.

Mortgage Rates Rise: 30-Year Fixed-Rate Mortgage Averages 7.18%

The latest data from Freddie Mac reveals a notable increase in mortgage rates, with the 30-year fixed-rate mortgage averaging 7.18% as of September 14. Here’s a detailed overview of the recent trends:

  • Current Rate: The average rate for the 30-year fixed-rate mortgage climbed to 7.18%, showing an uptick from the previous week’s rate of 7.12%.
  • Year-over-Year Comparison: Compared to the same period last year, the current mortgage rate of 7.18% represents a significant increase from 6.02%. This highlights the notable upward trend in mortgage rates over the past year.

Freddie Mac’s data provides valuable insights for prospective homebuyers, homeowners considering refinancing, and industry professionals tracking market trends. As mortgage rates continue to fluctuate, staying informed about these developments is crucial for making informed decisions in the housing market.

Residential Property Sales Analysis: Single-Family Homes and Condos/Co-ops

In August, the housing market experienced fluctuations in both single-family home sales and condominium/co-op transactions. Here’s a detailed breakdown of the recent trends:

Single-Family Home Sales:

  • Sales Volume: Single-family home sales declined to a seasonally adjusted annual rate of 3.60 million units, marking a 1.4% decrease from July’s figure of 3.65 million units.
  • Year-over-Year Comparison: Compared to the previous year, single-family home sales witnessed a significant decline of 15.3%, indicating a notable slowdown in market activity over the past year.
  • Median Home Price: The median price for existing single-family homes stood at $413,500 in August, reflecting a 3.7% increase from the same period in 2022. This uptrend in home prices suggests ongoing appreciation in the single-family housing market.

Condominium and Co-op Sales:

  • Sales Volume: Existing condominium and co-op sales reached a seasonally adjusted annual rate of 440,000 units in August, representing a 4.8% increase from July’s figures.
  • Year-over-Year Comparison: However, compared to the previous year, condo/co-op sales experienced a notable decline of 15.4%, indicating a challenging market environment for this segment.
  • Median Home Price: The median price for existing condos/co-ops was $354,600 in August, reflecting a 6.2% increase from the prior year. Despite the sales decline, condo/co-op prices continued to show resilience and appreciation.

These insights into the performance of single-family homes and condominiums/co-ops provide valuable information for buyers, sellers, and industry professionals navigating the current real estate landscape. Understanding the dynamics of these segments is essential for making informed decisions in the housing market.

Regional Analysis of Existing-Home Sales in August

The housing market in August witnessed varied trends across different regions of the United States. Here’s a detailed breakdown of existing-home sales and median prices in each region:

Northeast Region:

  • Sales Volume: Existing-home sales in the Northeast remained stable at an annual rate of 480,000 units in August, unchanged from July’s figures.
  • Year-over-Year Comparison: However, compared to the same period last year, Northeast home sales experienced a substantial decline of 22.6%, indicating a significant slowdown in market activity.
  • Median Home Price: The median price for existing homes in the Northeast was $465,700, marking a notable increase of 5.8% from the previous year. This uptick in median price suggests continued appreciation in the Northeast housing market.

Midwest Region:

  • Sales Volume: Existing-home sales in the Midwest saw a modest increase of 1.0% from the previous month, reaching an annual rate of 970,000 units in August.
  • Year-over-Year Comparison: Despite the monthly increase, Midwest home sales were down by 16.4% compared to August 2022, indicating a notable decline in market activity over the past year.
  • Median Home Price: The median price for existing homes in the Midwest stood at $305,300, reflecting a 6.8% increase from the previous year. This rise in median price indicates ongoing appreciation in the Midwest housing market.

South Region:

  • Sales Volume: Existing-home sales in the South decreased by 1.1% from July to an annual rate of 1.84 million units in August.
  • Year-over-Year Comparison: Compared to the previous year, South home sales experienced a decline of 12.4%, highlighting a slowdown in market activity over the past year.
  • Median Home Price: The median price for existing homes in the South was $366,100, showing a 3.2% increase from August 2022. This suggests continued price appreciation in the Southern housing market.

West Region:

  • Sales Volume: Existing-home sales in the West declined by 2.6% from the previous month to an annual rate of 750,000 units in August.
  • Year-over-Year Comparison: Similarly, compared to August 2022, West home sales were down by 15.7%, indicating a notable decline in market activity over the past year.
  • Median Home Price: The median price for existing homes in the West was $609,300, reflecting a modest increase of 1.0% from August 2022. Despite the sales decline, median prices in the West continued to show resilience.

Understanding these regional nuances is crucial for both buyers and sellers in navigating the current real estate landscape and making informed decisions.

Clare Trapasso
Clare Trapasso
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