Sales of existing homes rose 2.4% in August to its highest level since 2006 as the housing market recovers from a widespread shutdown in the spring brought on by the coronavirus outbreak.
The National Association of Realtors said Tuesday that sales rose to a seasonally adjusted annual rate of 6 million homes sold last month. Sales are up 10.5% from a year ago and back to pre-COVID-19 levels of early 2020.
Although the pace of sales has slowed significantly after back-to-back months of more than 20% gains, it’s the third straight monthly gain after big, consecutive declines in March, April and May.
The median price for an existing single-family home reached $315,000 in August, up 11.7% from August 2019. Last month was the first time the median price for a home breached $300,000.
Despite rising prices, the lack of available homes has buyers snatching them off the market at faster every month, especially with interest rates settling at historic lows under 3%.
Properties remained on the market for 22 days in August, down from 31 days in August of last year, NAR’s report noted. It said 69% of homes sold in August 2020 were on the market for less than a month.
A lack of available homes has been a problem for years, long before the virus outbreak spooked many homeowners into staying put. The number of property listings for sale in August was 1.49 million units, a decline of 18.6% from this time last year.
Many economists fear the lack of inventory will continue to stoke higher prices, pushing many would-be first-time buyers out of the market. First-time buyers made up about a third of purchases in August, about the same as all of 2019, according to a report from NAR that year. Historically, the Realtor group says, first-time buyers have made up about 40% of the primary residence home buyers in the market.
“This lack of supply continues to push home-price growth higher,” said economist Joel Kan of the Mortgage Bankers Association. “The 11% gain in prices is far above income growth and threatens overall affordability – especially for first-time buyers.”
Regionally, home sales have climbed in everywhere for three straight months when compared with the previous month. Median home prices grew at double-digit rates in each of the four major regions from one year ago.
Sales jumped 13.8% In the Northeast and 1.4% in the Midwest. The South and West saw more modest gains of 0.8% over the previous month.
All four regions saw median price gains of more than 10% from one year ago.