National Assoc. of Realtors: COVID can’t stop home sales
The National Association of Realtors (NAR) issued a release Tuesday in which the association says that existing-home sales continued to climb in August, marking three consecutive months of positive sales gains.
The northeast part of the nation saw the greatest improvement from the prior month.
Total existing-home sales rose to a seasonally-adjusted annual rate of six million in August. Sales as a whole rose year-over-year, up 10.5 percent from a year ago, which totaled 5.43 million in August 2019.
The median existing-home price for all housing types in August was $310,600, up 11.4 percent from August 2019 ($278,800), as prices rose in every region. August’s national price increase marks 102 straight months of year-over-year gains.
Total housing inventory at the end of August totaled 1.49 million units, down 0.7 percent from July and down 18.6 percent from one year ago, from 1.83 million. Unsold inventory sits at a 3.0-month supply at the current sales pace, down from 3.1 months in July and down from the 4.0-month figure recorded in August 2019.
Scarce inventory has been problematic for the past few years, according to Lawerence Yun, NAR’s chief economist, an issue he says has worsened in the past month because of the dramatic surge in lumber prices and the dearth of lumber resulting from California wildfires.
Yun said the need for housing will grow even further, especially in areas that are attractive to those who can work from home. NAR found in an August study, the 2020 Work From Home Counties report, that remote work opportunities are likely to become a growing part of the nation’s workforce culture.
Yun said he thinks this will continue, even after a coronavirus vaccine is available.
“Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” Yun said. “To assure broad gains in homeownership, more new homes need to be constructed.”
Properties typically remained on the market for 22 days in August, which is seasonally equal to the number of days in July and down from 31 days in August 2019, according to NAR. Sixty-nine percent of homes sold in August 2020, NAR pointed out, were on the market for less than a month.
First-time buyers were responsible for 33 percent of sales in August, down from 34 percent in July 2020, but up from 31 percent in August 2019. NAR found in 2019 that the annual share of first-time buyers was 33 percent.
Individual investors or second-home buyers, who NAR says account for many cash sales, purchased 14 percent of homes in August. The association said this a small change from July’s figure of 15 percent and equal to the August 2019 rate of 14 percent. All-cash sales accounted for 18 percent of transactions in August, up from 16 percent in July 2020 and down from 19 percent in August 2019.
According to NAR, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 2.94 percent in August, down from 3.02 percent in July. The average commitment rate across all of 2019 was 3.94 percent.
Here are some more stats:
- August 2020 saw existing-home sales in the Northeast jump 13.8 percent, recording an annual rate of 740,000, a 5.7 percent increase from a year ago. The median price in the Northeast was $349,500.
- Existing-home sales increased 1.4 percent in the Midwest to an annual rate of 1,410,000 in August, up 9.3 percent from a year ago. The median price in the Midwest was $246,300.
- Existing-home sales in the South rose 0.8 percent to an annual rate of 2.60 million in August, up 13.0 percent from the same time one year ago. The median price in the South was $269,200.
- Existing-home sales in the West inched up 0.8 percent to an annual rate of 1,250,000 in August, a 9.6 percent increase from a year ago. The median price in the West was $456,100.
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