Hanover Advisors Inc.
09/17/2024 | News release | Archived content
Home Sales Continue to Fall, as Prices Set a New Record
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Home Sales Continue to Fall, as Prices Set a New Record
September 17, 2024
Sales of previously owned homes continued their summer slump in August, as high prices and high mortgage rates keep buyers sidelined.
Existing home sales, which account for the bulk of the market, fell 2.5% in August from July to a seasonally adjusted annualized rate of 3.86 million, according to the National Association of Realtors (NAR).
On an annual basis, sales in August were 4.2% lower than a year prior. that is slightly below what industry analysts had expected. It also marks three consecutive months where the annualized sales rate has been below 4 million units.
The sales count is based on closings, meaning contracts that were signed in late June and July, when mortgage rates had started to ease, but were not as low as they are today. The average rate for a standard 30-year fixed mortgage was slightly above 7% in June, falling steadily to around 6.7% by the end of July, according to Mortgage News Daily.
NAR economists noted that while August was another disappointing month for sales, more recent developments like the downturn in mortgage rates and increasing inventory set conditions for sales to improve in the coming months.
The supply of homes on the market is indeed improving. There were 1.35 million homes on the market at the end of August. That's up just 0.7% from the month prior, but a massive 22.7% increase from August 2023. However, it still represents just a 4.2-month supply. Industry analysts generally consider a 6-month supply to represent a balance between buyers and sellers.
Constrained supply has kept price pressures elevated. The median price of a previously owned home in August was $416,700. That's an increase of 3.1% from the year prior and the highest price for August on record.
Looking at just the median price may distort an assessment of the market, however, as sales for homes priced above $750,000 were up significantly while sales of homes below $500,000 were down.
First-time buyers, who typically buy at the lower end of the market, made up just 26% of August sales, matching an all-time low record set in November 2021.
Mortgage rates have continued to fall through August and into September, with the 30-year fixed rate now sitting at 6.15%, the lowest in nearly two years.