Home buyers continued to take advantage of lower prices as they preferred more affordably-priced pre-owned homes over higher-priced new homes in August.
While sales of new single-family homes were unchanged compared to the previous month, sales of existing single-family homes increased by 7.4 percent in August to an adjusted annual total of 3.62 million units. The adjusted annual rate for pre-owned single-family units in July was 3.37 million, based on a report from the National Association of Realtors.
Compared to last year, however, this year’s adjusted annual total for August marked a decrease of 19.2 percent from the previous August’s 4.48 million units. Nevertheless, the 1.2-percent increase in the median price for pre-owned single-family homes in August this year to $179,300 was another encouragement to the real estate industry. Median prices for existing homes increased in ten out of 19 metro areas in August, although sales dropped year-over-year in all the 20 metro areas surveyed.
In the pre-owned condo and co-op sector, August sales also increased by 8.5 percent to an adjusted yearly total of 510,000 units from 470,000 units in July. Similar to the trend in pre-owned single-family units, sales of existing co-ops and condos also decreased by 17.1 percent when compared to last year’s August adjusted annual sales of 615,000 units. The price median also fell by 2.8 percent to $174,000.
For all types of existing homes, August sales increased over the month by 7.6 percent to an adjusted yearly rate of 4.13 million units, although the sales marked a 19-percent fall from the 5.1 million rate in last year’s August. The price median for all types of pre-owned homes in August also increased to $178,600, a slight surge of 0.8 percent from the August median last year.
For new homes, the adjusted annual sales pace in August was 288,000 units, the same pace as in July, based on data released by the U.S. Commerce Department. Compared to last year’s August, the sales pace was down by 29 percent. The August sales rate was the second lowest since 1963, next only to the adjusted annual rate of 282,000 units in May this year.
Sales of new homes in the West and the Northeast increased by 54 percent and 17 percent, respectively, while sales in the South and Midwest dropped by 26 percent and 11 percent, respectively.
Many home builders continue to struggle, as the price median for new homes in August dropped by 1.2 percent year-over-year to $204,700, their lowest level since December 2003. According to the National Association of Home Builders, the building of new homes must be stimulated as it has been crucial to recoveries in the past recessions. It said that every new home project creates three jobs for one year and yields an estimated $90,000 in taxes.