The National Association of Realtors (NAR) reported that existing-home sales in August were the highest they’ve been in 17 months. They were up 1.3% from July and gained 2.6% over August 1018’s sales rate.
What Are Existing-Home Sales?
As the term implies, existing-home sales refers to completed resales of existing real estate properties. This includes single-family homes, townhomes, condominiums and co-ops. These figures do not include “new construction” homes that were built and sold for the first time in August.
What is driving this increase in existing-home sales is the current mortgage rates. Interest rates have remained extremely low and home buyers are taking advantage. However, one hindrance that remains in today’s real estate market is inventory. There were actually fewer total homes available for sale in August (1.86 million) compared to July (1.9 million).
Why is the Housing Inventory Low?
With home prices also continuing to go up, many homeowners are content to stay in their homes and let their equity continue to grow. They, too, have been taking advantage of the mortgage rates by refinancing their home loans. Many are also cashing out equity or getting home equity lines of credit (HELOCs) to pay off other consumer debts and/or make upgrades to increase the value of their properties even more.
“Sales are up, but inventory numbers remain low and are thereby pushing up home prices,” says Lawrence Yun, NAR Chief Economist. “Home builders need to ramp up new housing, as the failure to increase construction will put home prices in danger of increasing at a faster pace than income.”
Additional Sales Data
There are some other interesting facts and figures from August 2019 that have been reported from NAR:
• Properties stayed on the market an average of 31 days
(Up from 29 days in July)
• Average median price for an existing-home was $278,000
(Up 4.7% compared to August 2018)
• Average 30-year conventional fixed-rate mortgage was 3.62%
(Down from 3.77% in July and 4.54% for all of 2018)
• First-time buyers made up 31% of August existing-home sales
(Down from 32% in July)
Even with low inventory, market conditions continue to be very favorable for home buyers and that’s why we’re seeing these numbers affected in terms of existing-home sales. We’ll see what September’s housing reports show when its sales data is compiled and analyzed. The interest rates have remained very low and we should see things moving in the same direction for this month.