The August 2019 Housing Market Recap shows existing home sales rose in August for the second month in a row. However, regional sales results were mixed, with gains in three regions and a loss in one. Prices continued to rise, as they have for seven and a half years. Days on the market rose, but inventory fell.
August existing home sales rose 1.3 percent from July, and were up 2.6 percent compared to August 2018, according to the National Association of Realtors® (NAR) August Existing Home Sales Report, released September 19th.
Home prices rose again. The median price of existing homes sold in August was $278,200, an increase of 4.7 percent from August 2018 ($265,600). We’ve now reached 90 consecutive months of year-over-year increases.
Days on the market (DOM) increased compared to July, moving from 29 to 31. A year ago, homes typically stayed on the market for 29 days. To look at it another way, 49 percent of homes were sold within a month of being listed for sale, so while the pace has slowed for a second month, the market continues to move quickly.
Inventory fell from July to August, and year-over-year, keeping us firmly in a seller’s market. At the current sales rate the supply of unsold inventory was 4.1 months, down from 4.2 months in July and 4.3 months a year ago. (NAR consider 6 months of inventory a balanced market.)
NAR chief economist Lawrence Yun attributed the increase in sales to lower mortgage rates, but also pointed out that low inventory continues to drive prices higher. “Sales are up, but inventory numbers remain low and are thereby pushing up home prices,” said Yun. “Homebuilders need to ramp up new housing, as the failure to increase construction will put home prices in danger of increasing at a faster pace than income.”
Regional results are mixed. Comparing August to July, sales jumped 7.6 percent in the Northeast, rose 3.1 percent in the Midwest, climbed a modest 0.9 percent in the South and fell 3.4 percent in the West. The Midwest led increases in year-over-year median home prices for the second month in a row, rising 6.6 percent, followed by the West at 5.7 percent and the South at 5.4 percent. The Northeast fell by 0.3 percent.
Holding Pattern. If you feel like we’re stuck in an endless loop of rising prices, and low inventory, you’re right. The pattern will change, but it’s been years since we’ve seen a buyer’s market. It’s still a great time to be a seller, but not so much fun if you want to buy. All I can do is repeat my advice to be a ready buyer. How? Start by lining up your financing (with a First Choice Loan Services Inc. mortgage loan originator, of course!). Next, work with a trusted Realtor® and expand your search. Look at areas outside your preferred search zone. Look at home styles that may not be your ideal. Look at homes that need some work. A final thought. Home values have been increasing steadily. If you are paying rent while you wait for the perfect home, you are losing twice, once by paying the property owner’s mortgage, and again by missing an opportunity to build equity.