Existing sales fell in August to their second-lowest pace of 2016 (5.33 million). But don’t let the down sales number fool you. This is a very active housing market.
Properties in August typically sold 10 days quicker than a year ago, inventory has now declined year-over-year for 15 straight months, and after increasing again in August (5.1 percent), existing-home prices have risen year-over-year for 54 consecutive months.
Supply < Demand. It’s why despite historically low mortgage rates and strong job growth, too many would-be buyers are struggling to find affordable homes in their price range.
The homeownership rate remains stuck near 50-year lows. There are many economic and lifestyle reasons behind this, including young adults’ difficulty saving for a down payment and them putting off marriage and raising a family. However, until supply measurably increases to tame price growth and preserve affordability, many prospective buyers trying to reach the market will remain on the sidelines.
Lawrence Yun, NAR chief economist, said it best during this morning’s press conference: “Home sales are incapable of climbing higher if new inventory isn’t keeping pace.”