Welcome to Extreme Investor Network, where we bring you the latest insights and analysis in the world of business news. Today, we are diving into the latest data on the housing market provided by the National Association of Realtors.
In August, sales of previously owned homes dropped by 2.5% from July, coming in slightly lower than analysts’ expectations. This marks the third consecutive month of sales below the 4 million mark on an annualized basis. However, there is hope on the horizon as lower mortgage rates and increasing inventory may serve as a catalyst for future sales growth.
The average rate on a 30-year fixed loan fell from slightly over 7% in mid-June to 6.7% by the end of July, creating an attractive environment for potential homebuyers. Lawrence Yun, NAR’s chief economist, commented on the situation, stating that the combination of lower mortgage rates and more inventory sets the stage for a potential uptick in sales in the coming months.
Inventory levels have shown some improvement, with 1.35 million units for sale at the end of August, up 0.7% from July and 22.7% year over year. Despite this increase, there is still just a 4.2-month supply of homes on the market, indicating that the balance between buyers and sellers remains precarious. In areas with limited supply, sellers continue to have the upper hand.
The tight supply situation has put pressure on prices, with the median price of an existing home sold in August reaching $416,700, the highest price ever recorded for the month of August. First-time buyers made up only 26% of sales in August, matching the all-time low from November 2021. Additionally, all-cash sales remained high at 26%.
Looking ahead, mortgage rates continued to decline in August and September, with the 30-year fixed rate hitting 6.15%, the lowest level in approximately two years. This favorable rate environment, coupled with improving inventory levels, paints an optimistic picture for the housing market in the coming months.
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