U.S. sales of existing homes slipped 0.5 percent in August, to a “sustainable” seasonally adjusted annual rate of 6.30 million units, the National Association of Realtors today reported. That was 12.6 percent below the August 2005 pace of 7.21 million units/year, which was the second-highest rate on record.
“After a stronger-than-expected drop in July, the fairly even sales numbers in August tell us the market is at a more sustainable pace,” said David Lereah, the NAR’s chief economist. “It keeps us on track to see the third-highest sales year on record.
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“But we do expect an adjustment in home prices to last several months, as we work through a buildup in the inventory of homes on the market.”
The U.S. median price for existing homes of all housing types was $225,000 in August – that is, half of homes sold for more, and half sold for less – down 1.7 percent from August 2005’s median of $229,000.
“This is the price correction we’ve been expecting,” Lereah said. “With sales stabilizing, we should go back to positive price growth early next year.
The total housing inventory was up 1.5 percent at the end of August to 3.92 million existing homes on the market, a 7.5-month supply at the current pace. That’s the highest supply since April 1993, the association said.
That calls for adjustments in the asking price, said NAR President Thomas M. Stevens, in Vienna, Va. “In some areas, home sellers are not making sufficient adjustments in their listing price, so their homes are staying on the market,” Stevens said.
The U.S. rate of single-family home sales was unchanged from July, at a seasonally adjusted rate of 5.51 million per year, but was down 12.3 percent from August 2005’s rate of 6.28 million units per year. The median price of existing single-family homes was $225,700, down 1.7 percent from August 2005.
For existing condominium and cooperative housing units, sales fell 3.5 percent in August to a seasonally adjusted 793,000 units per year, down 14.5 percent from August 2005’s rate of 928,000 units per year. The median price for existing units in August was $223,000, down 2.4 percent from the year-ago period.
In the Northeast, the Realtors said, sales of existing homes rose 1.9 percent in August, to 1.07 million units per year, or 11.6 percent short of the year-ago rate. The median price of existing homes in the region was $271,000, down 3.9 percent from August 2005.
The full NAR report can be found online at www.realtor.org.
