Sales of existing U.S. homes in August increased by 2.4%, the National Association of Realtors reported on Tuesday.
The increase marks the third consecutive month of sales gains. However, those gains have slowed considerably since July, which saw a record-breaking 24.7% increase. That exceeded the previous record monthly increase in sales, which was 20.7%.
The association expects to see continued gains through the rest of the year because interest rates are at historic lows.
“Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery,” said Lawrence Yun, the association’s chief economist.
Yun said the need for housing will grow even further, especially in areas that are attractive to those who can work from home.
Existing-home sales increased by more than 10% from August 2019. Sales prices have also increased since last year. The median existing-home price for all housing types in August was $310,600, up 11.4% from August 2019. August’s national price increase marks 102 straight months of year-over-year gains.
One factor in higher sale prices is that fewer homes are on the market.
Total housing inventory at the end of August totaled 1.49 million units, down 0.7% from July and down 18.6% from one year ago. Unsold inventory is at a three-month supply at the current sales pace, down from 3.1 months in July and down from four months in August 2019. Still, an overwhelming majority of homes, 69%, were on the market for less than a month in August 2020.
Scarce inventory has been problematic for the past few years, according to Yun. However, he said the issue has worsened in the past month due to the surge in lumber prices and the dearth of lumber resulting from California wildfires.
“Over recent months, we have seen lumber prices surge dramatically,” Yun said. “This has already led to an increase in the cost of multifamily housing and an even higher increase for single-family homes.”
For the survey, the association calculates existing-home sales as transactions completed in the month on single-family homes, town homes, condominiums, and co-ops.
