Home prices continued to rise during the month of August, even as home sales declined, as a result of lower inventory of homes for sale, causing prices to rise and home prices to decline. Stubbornly high Mortgage rates are keeping potential buyers out of the market, according to a monthly report from the National Association of Realtors.
The median price of existing homes — which includes single-family homes, townhomes, condominiums and co-ops — was $407,100 last month. That was 3.9% higher than last year when the median home price was $391,700. The NAR report found that prices rose in all four regions of the country: the Northeast, Midwest, South and West.
The previous month, in July, prices also rose, reversing five months of year-on-year decline. The average price in August was the highest August price ever and the fourth highest of any month. August was the third month in a row that the median sale price exceeded $400,000.
After rising during the pandemic, home prices have calmed for several months.
“Home prices continue to rise despite declining home sales,” Lawrence Yun, chief economist at NAR, said in a statement. “Supply needs to moderate gains in house prices.”
The extremely low level of homes for sale keeps prices high as buyers compete for the few available homes in each local market.
At the end of August, unsold existing home inventory fell 0.9% from the previous month to 1.1 million units, or the equivalent of a 3.3-month supply at the current monthly sales pace.
With fewer homes on the market, home prices rising and mortgage rates remaining high throughout the summer, the number of sales completed in August, which were likely to go under contract in June or July, was down from the previous month.
Existing home sales came in below expectations and fell 0.7% in the July-August period to a seasonally adjusted annual rate of 4.04 million units. Analysts were expecting an increase of 1.5% and a sales pace of 4.10 million.
On an annual basis, August sales decreased by 15.3% from last year when the pace of sales was 4.77 million units.
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