Dive Brief:
- After three months of growth, existing home sales fell by 4.8% to 5.31 million units in August, despite a 4% increase in first-time homebuyer share, according to the National Association of Realtors.
- The median existing-home prices in August was $228,700, representing the 42nd consecutive month of year-over-year price gains. Total inventory increased 1.3%, and unsold inventory was at a 5.2-month supply, up from July's supply of 4.9 months.
- Homebuilding activity, according to the NAR, is lacking in a majority of metro areas and is contributing to ongoing housing shortages and to unhealthy price growth — which may be deterring potential buyers.
Dive Insight:
According to the NAR, affordability was a leading factor contributing to the August fall in existing home sales, and limited housing starts are exacerbating the problem of low inventory.
In a report earlier this month, NAR economist Lawrence Yun said, "As local job markets continue to expand, the pool of home buyers will only increase. That’s why it’s crucial for builders to begin shifting their focus from apartments to the purchase market and make up for lost time. If not, severe housing shortages and faster price appreciation will erode affordability and remain a burden for buyers trying to reach the market."
According to the Commerce Department, housing starts fell 3% in August , and as labor shortages continue to plague the construction industry, builder contributions to affordability are unlikely to materialize in the near term.
