Washington, D.C. CNN –
House prices continued to rise in August even as home sales fell, according to a monthly report from National. That’s because low inventory of homes for sale drove up prices and stubbornly high mortgage rates kept potential buyers out of the market, according to the Association of Real Estate Agents.
The median price for existing homes — including single-family homes, townhomes, condos and co-ops — was $407,100 last month. That’s up 3.9% from a year ago, when the median home price was $391,700. According to the NAR report, prices increased in all four regions of the country, the Northeast, Midwest, South and West.
Prices also rose in the previous month of July, making up for five months of year-on-year declines. The median price in August was the highest price ever for August and the fourth highest price of any month. August was the third consecutive month in which the median sales price was above $400,000.
After rising during the pandemic, property prices cooled for several months.
“Home prices continue to rise despite lower home sales,” Lawrence Yun, NAR chief economist, said in a statement. “Supply needs to essentially double to moderate the rise in house prices.”
Due to the exceptionally low number of homes for sale, prices are rising as buyers compete for the few available homes in each local market.
At the end of August, the inventory of unsold existing homes fell 0.9% month-over-month to 1.1 million units, representing a 3.3-month supply at the current monthly sales pace.
With few homes on the market, home prices rising and mortgage rates remaining high throughout the summer, the number of closed sales in August, which likely went into contract in June or July, fell compared to the previous month.
Existing home sales fell short of expectations, falling 0.7% to a seasonally adjusted annual rate of 4.04 million units in July-August. Analysts expected a gain of 1.5% and a sales pace of 4.10 million.
Year-on-year sales fell 15.3% in August compared to a year ago, when the sales pace was 4.77 million units.