Home prices continued to climb in August, even as home sales dropped, a result of the low inventory of homes for sale pushing prices up and stubbornly high mortgage rates keeping would-be buyers out of the market, according to a monthly report from the National Association of Realtors.
The median price for existing homes — which include single-family homes, townhomes, condominiums and co-ops — was $407,100 last month. That was up 3.9% from a year ago when the median home price was $391,700. Prices rose in all four regions of the country, the Northeast, Midwest, South and the West, the NAR report found.
The month before, in July, prices also went up, reversing five months of year-over-year declines. The median price in August was the highest price of any August on record and the fourth highest of any month. August marked the third consecutive month the median sales price was over $400,000.
After surging during the pandemic, home prices cooled off for several months.
“Home prices continue to march higher despite lower home sales,” Lawrence Yun, NAR chief economist, said in a statement. “Supply needs to essentially double to moderate home price gains.”
Low inventory pushed prices higher
An extraordinarily low level of homes for sale is keeping prices higher as buyers compete for the few homes available in each local market.
At the end of August the inventory of unsold existing homes was down 0.9% from the prior month to 1.1 million units, or the equivalent of 3.3 months’ supply at the current monthly sales pace.
With few homes on the market, home prices climbing and mortgage rates remaining elevated all summer, the number of completed sales in August, which likely went into contract in June or July, dropped from the month before.
Sales of existing homes fell short of expectations and were down 0.7% from July to August to a seasonally adjusted annual rate of 4.04 million units. Analysts were expecting an increase of 1.5% and a sales pace of 4.10 million.
Annually, August sales were down 15.3% from a year ago when the sales pace was 4.77 million units.
