The National Association of Realtors reported Monday that signed contracts to buy previously-owned homes fell 1 percent in August, a far steeper decline than the 0.1 percent fall Wall Street anticipated. The report ends four consecutive months of gains, as sale increases in the Northeast and Midwest were weighed down by larger-than-expected declines in the South and West.
“There was a marked decline in all-cash sales from investors,” said Lawrence Yun, NAR chief economist. “On the positive side, first-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country.”
Total sales of existing-home sales, a measurement of completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 1.8 percent to a seasonally adjusted annual rate of 5.05 million in August. For the prior months of July, the same measure was downwardly-revised 5.14 million. While sales were clocked in at the second-highest rate in 2014, they remain 5.3 percent under the 5.33 million-unit level from August of last year.
Existing-home sales in the Northeast increased 4.7 percent to an annual rate of 670,000, but also remain 4.3 percent below sales measured a year ago. The median price in the Northeast was $265,800, which is 0.8 percent lower than a year ago.
In the Midwest, existing-home sales increased 2.5 percent to an annual level of 1.24 million in August, but remain 3.9 percent below August 2013. The median price in the Midwest was $173,800, an increase of 5.9 percent from a year ago.
However, existing-home sales in the South fell 4.2 percent to an annual rate of 2.03 million in August, bringing them down 4.2 percent from August 2013. The median price in the South was $186,700, up 4.7 percent from a year ago.
Meanwhile, existing-home sales in the West fell 5.1 percent to an annual rate of 1.11 million in August, and now measure down 9.8 percent from a year ago. The median price in the West was $301,900, or 5.4 percent above measurements from the prior year.
Still, despite the dim news, the NRA’s chief economist remains optimistic.
“As long as solid job growth continues,” Yung adds, “wages should eventually pick up to steadily improve purchasing power and help fully release the pent-up demand for buying.”