According to the National Association of Realtors, sales of previously owned homes fell 2% in July-August to 5.88 million units on a year-over-year basis.
Sales for the first annual fall were 1.5% lower than in August 2020. But sales are still above pre-epidemic levels.
These numbers are based on home closure calculations and contracts signed in June and July.
“The housing sector is definitely stabilizing,” said Lawrence Eun, chief economist at Realtors, who called last year’s Super Surge “an inconsistency.”
Home supplies for sale at the end of August fell 1.5% per month to 1.29 million. Compared to August 2020, inventory is 13% lower, but that comparison has been shrinking for months. The current sales pace was 2.6 months supply.
“We expect more inventory to come, perhaps with the end of the eviction moratorium,” Eun said.
Tough supply pushed the median price of an existing home sold in August to 356,700, an increase of 14.9% since August 2020. Although the profits are much larger, the annual comparisons are moderate as sales are slow.
The middle ground is also slanting due to strong activity at the high end of the market. Home sales worth less than $ 250,000 are down from a year ago, while home sales over 1 million are up 40%.
First-time buyers are clearly struggling with high prices, which are down to just 19% of all sales, the lowest since January 2019.
Eun said the market as a whole is becoming less competitive, with buyer traffic declining and the number of buyers waiving inspections, a competitive strategy is also declining. The number of offers in a typical home is now 3.8 compared to 4.5 a month ago.
According to the Mortgage News Daily, the mortgage rate fell to 2.78% in June from 3.25% in June, based on a fixed 30-year popularity in early August. The drop could help first-time buyers the most, as they tend to be the least financially volatile and most sensitive to interest rates, but obviously they’re not helping enough.
Sales of newly built homes, which are based on signed contracts, did not stop in July, and therefore match the number of recent existing home sales, increased slightly each month but declined 2 %% from July 2020, according to the U.S. Census.
Manufacturers are raising prices to maintain rising costs for land, labor and materials. Recent earnings reports and notes from the country’s largest manufacturers have problems with the supply chain that are hampering production and leading to fewer new home closures.