August brought an increase of new home sales, while existing home sales saw a drop.
According to the National Association of Home Builders, sales of newly built single-family homes grew 1.5% to 740,000 in August. Year over year, sales are up 2.4%. Inventory for newly built homes remains stable, at 6.1 months, with 378,000 units for sale, up 74.3% year over year. However, the median sales price has jumped 21% year over year, rising from $325,00 to $390,900, mostly due to higher cost of supplies, like lumber, due to the pandemic.
NAR found that existing home sales dropped 2% in August. Inventory of existing home sales is at 2.6 months, or at 1.29 million homes, down 1.5% from July and down 13.4% year over year. Just like with newly built homes, existing homes have also seen price increases. For the past 114 months, existing home prices have posted year over year increases. In August, the median home price was $356,700, up 14.9% year over year. Nearly 90% of properties on the market sold within a month, with the average length on the market being 17 days, down from 22 days a year ago. First-time buyers made up 29% of existing home purchases, down 1% from July and from 33% a year ago. Student loans are impacting many non-owners, especially millennials, impacting their ability to become first-time homebuyers.
“Securing a home is still a major challenge for many prospective buyers,” said Dr. Lawrence Yun, NAR’s chief economist. “A number of potential buyers have merely paused their search, but their desire and need for a home remain.”
Yun said prices should normalize with more supply.