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West Leads Drop in Existing Home Sales

The pace of existing home sales slowed last month, and it was activity in the West that saw the biggest decline. Meanwhile, the share of distressed sales is at a nearly seven-year low.

During August, the number of
pre-owned single-family homes, townhomes, condominiums and co–ops that sold came in at a seasonally adjusted annual rate of 5.31 million.

Existing U.S. home sales, which are completed sales transactions, were down from the previous month’s rate of 5.58 million. July’s figure was revised down from
5.59 million originally reported.

The National Association of Realtors released the statistics Monday.

Sales were impacted by a persistently tight inventory, according to NAR Chief Economist Lawrence Yun.

The report indicated, however, the the pace of existing home sales has accelerated from one year prior, when the rate was 5.00 million. It was the 11th consecutive year-over-year improvement.

Existing home sales in the West had the biggest impact on national home sales, falling 7.8 percent to a rate of 1.19 million in August 2015. Sales declined 6.6 percent in the South to a rate of 2.14 million, while a 1.5 percent drop in the Midwest left the rate at 1.28 million.

The Northeast was the only region not to see a decline, with the rate there remaining at 0.70 million.

On just single-family homes, existing sales dropped 5.3 percent from July to an annual rate of 4.69 million.

One bit of positive news is average home prices.

“Price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year,” Yun stated in the report.

The median price on existing home sales was $228,700 last month, a 4.7 percent rise from August 2014 and the 42nd month in a row that prices were up from a year earlier.

The median price on a single-family homes was $230,200 in the most-recent month.

The latest overall activity left the U.S. housing inventory at 2.29 million, up 1.3 percent from July.

But existing homes for sale have diminished from 2.33 million as of August 2014.

Based on the current rate of sales, it would take 5.2 months to clear out the inventory of existing homes for sale, more than the 4.9 months in July.

“With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall even with the overall pool of buyers shrinking because of seasonal factors,” Yun added.

First-time buyers were responsible for 32 percent of August’s sales, while all-cash share was 22 percent. Distressed sales made up seven percent — the lowest share since NAR started tracking this metric in October 2008.

Homes sold last month were on the market for an average of 47 days, longer than 42 days in July but shorter than 53 days during August of last year.

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