US existing home sales fell again in August, and prices were higher compared to the same month last year.
That’s according to the latest update from the NAR, which said Thursday that sales ran at a 4.04 million annual pace last month.
That was below estimates. Consensus was 4.1 million. The range of guesses, from nearly five-dozen economists, was 4 million to 4.25 million. So, the print matched the lowest forecast.
August’s pace matched (basically) the most tepid rate since May of 2020, when the US economy was still reeling from the original COVID lockdowns. The 0.7% monthly decline was the third in a row and the 17th in 19.
It’s the same story. There’s just not enough supply. People can’t buy what isn’t for sale. And nothing’s for sale. “Home prices continue to march higher despite lower home sales,” NAR Chief Economist Lawrence Yun said. “Supply needs to essentially double to moderate home price gains.”
Builders are trying, but they can’t catch up. Nobody’s going to trade a four- or five-handle mortgage for a seven-handle, notwithstanding a bump in refis last week. That puts the entire burden on new construction.
Inventories shrank 0.9% from July and more than 14% from a year ago. Months supply was 3.3.
Prices are, of course, rising again on a YoY basis, which is to say they might as well be at record highs. The median existing home price was up nearly 4% last month.
At $407,100, August was the third straight month during which the median sales price exceeded $400,000.
So, that’s $400,000 for a used wooden box, and that’s if you’re satisfied being a “median economic person,” as Jerome Powell might put it. If you want to be a Jerome Powell-type “economic person,” you’ll need more. A lot more. Like, five times more. At least.
Note from the figure that the YoY price relief lasted just four months. Five if you count unchanged prices in February.
A Harris poll commissioned by Bloomberg this month revealed that almost half (!) of America’s young adults are now living with their parents. Housing costs are a major factor. As one 23-year-old told Paulina Cachero and Claire Ballentine, “I have my whole life to move into a nice apartment or house.”
Poor kids, I could not wait to leave my parent’s house for a gross, cold, ugly dorm/apartment.
lol — my first apartment was in Reagan-era DC, living above the landlord in a 5-unit converted townhouse in (otherwise nice) Dupont Circle. He was an ex-Army coke dealer who used prostitutes to make his deliveries. I stopped paying rent for many months when he wouldn’t fix the kitchen sink among other things and he didn’t press me for it. But one day, I came home to an IRS lien notice on the front door and after I entered, an agent inside told me to start remitting my rent directly to the IRS. Knowing I “owed” my landlord thousands in back rent and worried he might report that disputed receivable to the Feds, I moved out shortly thereafter under the cover of night. I did have to abandon my drum set to get out of there quietly, but they were worth a lot less than I potentially owed, so I made the sacrifice. If my parents only knew …