U.S. home sales remain brisk, and strong, according to the National Association of REALTORS® and its August Existing Home Sales report, 5.48 million homes were sold on a seasonally-adjusted, annualized basis last month– the highest tally in more than 6 years.
Half of homes sold last month were sold in fewer than 43 days. Buyers are bidding up home prices as U.S. housing continues to support the broader U.S. economy.
Existing Home Sales Have Hit a 6-Year High
Each month, the National Association of REALTORS® publishes its Existing Home Sales report, a sales tally of previously-occupied U.S. homes.
In June, 5.48 million homes were sold on a seasonally-adjusted annualized basis, a two percent increase from the month prior and a 13% increase as compared to one year ago.
It’s the highest reading since February 2007, a month predating last decade’s housing market downturn and its $8,000 federal home buyer tax credit stimulus. Furthermore, home sales are coming at a time of scarce home inventory.
NAR reports just 2.25 million homes for sale nationwide at the end of August, a 6% decrease from one year ago and nearly one-third fewer than during 2010.
At the current rate of sales, the entire stock of U.S. homes for sale would be “sold out” in 4.9 months. This is a big deal because analysts believe that a 6.0-month supply of homes represents a market in balance between buyers and sellers. When supply dips below six months, sellers gain leverage over buyers which can lead home prices higher.
Home supply has been below 6.0 months since August 2012. The average home sale price has climbed 11% during that time.
Median “Days On The Market” Now 43 Days
The August Existing Home Sales report showed more than just “strong home sales”. It also showed that homes are selling much more quickly as compared to recent years.
The August report showed the median Days on Market for homes sold in August at 43 days for all sold homes. More than 4 in 10 homes sold in less than one month.
To put this into perspective, compare the last three years:
- August 2010 : Median 92 Days on Market
- August 2011 : Median 70 Days on Market
- August2012 : Median 43 Days on Market
If we remove foreclosure and short sales from the home sale data, Median Days on Market drops to 41 days.
Homes are selling quickly today. Multiple-offer situations are common and sellers have negotiation leverage over buyers in many U.S. markets. For today’s buyers to have the best chance of getting a “great deal”, a willingness to act quickly is important.
A mortgage pre-approval letter can help, too.
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