September 26, 2022

Existing Home Sales Beat Expectations

The National Association of Realtors released their Existing Home Sales Report for the month of August. It was a strong one. Remember this report measures signed contracts on existing homes and it was pretty much flat from July down just 0.4% which was better than expectations that were estimating a decline of 2.5%. Year over year it was down 20%, but when looking at inventory levels and higher interest rates, this report did show a lot of resiliencies in the housing market.

Digging deeper into this report, we see that first-time homebuyers are hanging in there and making up about 29% of all purchases. Cash buyers made up 24% of sales and investors made up about 16% of purchases or 1 in 16 transactions.

On the other end we see inventories cresting. This happens just about every year since this market is very seasonal. In August there were about 1.28 million homes in supply which was a drop from July which was at 1.31 million. At the current sales pace there is about a 3.2 months’ supply of homes on the market. A more normal market has about a 6-month supply. When looking at supply, out of all the available homes 779,000 homes are active listings. This means 39% of homes are under contract, so there really only is 1.9 months’ worth of supply when considering active listings. Homes sat on the market on average for 16 days, which is still blistering fast but up from July’s average of 14 days. This shows that if homes are priced right, they are still moving and moving fast.

In summary, even though this report showed a slight cooling from July, the housing market is still very hot and more existing homes sold than estimated. It is evident that demand for homes is still strong even in the face of higher rates and higher prices.

By: Jon Iacono
A Family

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