Existing-home sales hit 6-year high in August
Existing-home sales were at their highest in six and a half years in August, rising 1.7% to a seasonally adjusted annual rate of 5.48 million. Specifically, single-family home sales were up 1.7% to a seasonally adjusted annual rate of 4.84 million.
Despite the record numbers, National Association of Realtors chief economist Lawrence Yun cautioned that they may represent a temporary peak.
“Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,” he said. “Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.”
Meanwhile, NAR president Gary Thomas said rising home values may encourage more people to sell.
“As the equity position of most homeowners continues to improve, some who have been on the sidelines will list their home for sale,” he said. “Most of those owners also will be buying another home, but higher levels of new home construction going into 2014, combined with some reduction in demand from less favorable affordability conditions, will help to moderate price growth to more sustainable levels.”
August’s figures were up from 5.39 million in July and realized a 13.2% year-over-year increase since August 2012’s 4.84 million-unit rate. Existing home sales have remained above year-ago levels for the past 26 months.
Total housing inventory was up 0.4% to 2.25 million existing homes available for sale, representing a 4.9-month supply. This is down slightly from July’s 5.0-month supply.
The median price, at $212,000, was at its ninth consecutive month of double-digit year-over-year increases and was up 14.7%, year-over-year. This represented the strongest year-ago increase since October 2005, when it rose 16.6%.
August’s existing home sales are the highest since February 2007, when they hit 5.79 million.
NAHB accentuates positive in starts data
While housing starts for August again failed to rise above the 900,000 pace, the National Association of Home Builders celebrated the gain in single-family starts.
Led by a solid increase in single-family starts, nationwide housing production rose 0.9% to a seasonally adjusted annual rate of 891,000 units in August, according to figures released Wednesday by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Meanwhile, construction of multi-family buildings slowed following a rebound in the previous month.
“Overall, this is an encouraging report as builders are seeing pent-up demand begin to be released for single-family homes despite headwinds, such as rising mortgage rates and tight credit conditions,” said Rick Judson, NAHB chairman and a home builder from Charlotte, N.C.
“This is the kind of signal we’ve been looking for, with single-family starts and permits up or holding steady across every region in the nation,” said NAHB chief economist David Crowe.
“Today’s report is reflective of gradual improvement in buyer confidence in the overall market and our recent surveys that indicate a solid outlook for single-family production. On the multi-family side, we are catching up with underlying rental demand. We expect to see additional multi-family starts in the future, but not as rapid a pace of growth as we’ve seen in the past.”
Single-family housing starts rose 7% to a 628,000-unit pace. Regionally, single-family starts activity rose 9.6% in the Northeast, 7.1% in the Midwest, 2.3% in the South and 17.5% in the West.
The annualized rate of multifamily production fell 11.1% to a seasonally adjusted annual rate of 263,000 units.
Overall building permits, which are an indicator of future building activity, declined 3.8% to 918,000 units in August. This was due entirely to a pullback in the multi-family sector, where permits fell 15.7% to 291,000 units. Single-family permits posted a 3% gain to 627,000 units — the best pace since May 2008.
Regionally, single-family permit issuance increased 2.9% in the Midwest, 2.5% in the South, 5.3% in the West and held steady in the Northeast.