Low supply limits summer home sales

Photo credit: Michael Patrick

A low supply of property in the US limited home sales this summer, according to new figures. Existing home sales dipped in August 2015, despite three months of rising sales in a row, according to the National Association of Reators.

Total existing–home sales fell 4.8 percent to a seasonally adjusted annual rate of 5.31 million in August from a slight downward revision of 5.58 million in July. Despite last month's decline, sales have risen year–over–year for 11 consecutive months and are 6.2 per cent above a year ago.

Lawrence Yun, NAR chief economist, says that tight inventory deterred some buyers.

"The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year," he adds.

Indeded, the median existing–home price in August was $228,700, 4.7 per cent above August 2014 ($218,400) - the 42nd consecutive month of year–over–year gains, but less extreme than the annual growth recorded in recent months.

Total housing inventory at the end of August also rose 1.3 per ent to 2.29 million existing homes available for sale, a positive step in the right direction, despite remaining 1.7 per cent lower than a year ago (2.33 million).

"With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall even with the overall pool of buyers shrinking because of seasonal factors," continues Yun.

The other promising sign for the future health of the market is the return of first-time buyers: the share of sales accounted for by first-timers rebounded to 32 per cent in August 2015, up from 28 per cent in July.