Existing home sales nationwide were up sharply in August, despite tightened credit and disruptions in the Northeast caused by Hurricane-turned Tropical Storm Irene.
Nationally, sales of existing homes – which include single-family and multi-family homes – rose 7.7 percent to a seasonally adjusted annual rate of 5.03 million in August from 4.67 million in July. Sales are 18.6 percent higher than the 4.24 million-unit level in August 2010.
“Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations,” said Lawrence Yun, chief economist for the National Association of Realtors. “Investors were more active in absorbing foreclosed properties. In addition to bargain hunting, some investors are in the market to hedge against higher inflation.”
The Northeast saw the most modest gains as existing home sales rose just 2.7 percent in August to an annual pace of 770,000. Though the month over month increase lagged the rest of the country, it’s still 10.0 percent above a year ago.
Yun said Irene, which hit the Northeast during the final weekend in August, likley accounted for the lag as many business were shuttered and a normally busy weekend for closings was stagnant. September numbers may also lag due to massive flooding across the region from the storm that followed Irene.
The Western portion of the country lead all regions as existing home sales jumped 18.3 percent to an annual pace of 1.23 million in August and are 20.6 percent higher than August 2010.
Home prices continued to plummet in August with the national median existing-home price for all housing types at $168,300, down 5.1 percent from August 2010. Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 31 percent of sales in August, compared with 29 percent in July and 34 percent in August 2010.
Cancelled contracts remained a problem in August as 18 percent of NAR members reported a contract failure, up from 16 percent in July and 9 percent in August 2010.
Single-family home sales accounted for the bulk of the August increase, rising 8.5 percent to a seasonally adjusted annual rate of 4.47 million in August, up from 4.12 million in July, and up 20.2 percent over the 3.72 million pace in August 2010. The median existing single-family home price was $168,400 in August, down 5.4 percent from a year ago.
Existing condominium and co-op sales increased 1.8 percent to a seasonally adjusted annual rate of 560,000 in August from 550,000 in July, and are 8.3 percent higher than the 517,000-unit level one year ago.
Total housing inventory at the end of August fell 3.0 percent to 3.58 million existing homes available for sale, which represents an 8.5-month supply at the current sales pace, down from a 9.5-month supply in July.
Coverage from prior months’ reports: