A news release by the National Association of REALTORS® on the August 2022 housing market shows seven straight months of decline in existing home sales.
Total sales of existing homes—including single-family homes, townhomes, condos and co-ops—dropped to a seasonally adjusted annual rate of 4.8 million in August, down 0.4% from July.
Year-over-year, sales dropped 19.9% from 5.99 million in August 2021.
The housing sector is the most sensitive to and experiences the most immediate impacts from the Federal Reserve’s interest rate policy changes. The softness in home sales reflects this year’s escalating mortgage rates. Nonetheless, homeowners are doing well with near nonexistent distressed property sales and home prices still higher than a year ago.
After five consecutive monthly increases, the inventory of existing homes dropped 1.5% to 1.28 million from July to the end of August.
Unsold inventory now sits at 3.2 months at the current sales rate—equivalent to July but up from 2.6 months a year earlier.
Inventory will remain tight in the coming months and even for the next couple of years. Some homeowners are unwilling to trade up or trade down after locking in historically-low mortgage rates in recent years, increasing the need for more new-home construction to boost supply.
Housing market trends
Aside from inventory and home sales, here are the latest housing market trends to watch:
- Median existing-home price for all housing types in August was $389,500—up 7.7% from August 2021, marking 126 consecutive months of year-over-year increases. But this is the second straight month showing a month-to-month drop in the median sale price from June’s record high of $413,800.
- Days on market hit 16 days in August, up from July’s 14 and down from 17 days a year earlier. Of homes sold in August 2022, 81% stayed on the market for less than a month.
- First-time buyers bought 29% of the homes sold in August, consistent with July 2022 and August 2021. According to NAR’s 2021 Profile of Home Buyers and Sellers, the annual share of homes sold to first-time buyers was 34%.
- All-cash sales accounted for 24% of home sale transactions in August, the same as July but up from 22% a year earlier.
- Investors and second-home buyers bought 16% of the homes sold in August, up from 14% the month before and 15% in August 2021.
- Distressed sales—foreclosures and short sales accounted for 1% of home sales in August, consistent with July 2022 and August 2021.
- Average commitment rate in August for a 30-year conventional fixed-rate mortgage was 5.22%, down from 5.41% a month ago. The average commitment rate across 2021 was 2.96%.
Single-family homes and condos/co-ops
In August, sales of single-family homes dropped to a seasonally adjusted annual rate of 4.28 million, down 0.9% from July’s 4.32 million and down 19.2% from last year. The median price for existing single-family homes was $396,300 in August, up 7.6% from a year ago.
Sales of existing condominiums and co-ops reached 520,000 units in August, up 4.0% from the previous month and down 24.6% from a year ago.
The median price for existing condos in August was $333,700, up 7.8% from August 2021.
Home sales by region
The West and South saw the biggest increases in median home prices, while both regions also experienced the most significant drops in existing home sales.
No region saw a net increase in home sales or a net decrease in median home prices.
- Northeast—existing home sales grew 1.6% from July to an annual sale rate of 630,000 homes in August, down 13.7% from a year ago. The median price for the region was $413,200, up 1.5% from the year before.
- Midwest—existing home sales dropped 3.3% from July to an annual sales rate of 1,160,000 in August, down 15.9% from a year ago. The median price for the Midwest was $287,900, up 6.6% from the year before.
- South—existing home sales in August were identical to July with an annual rate of 2,130,000, down 19.3% from the year before. The median price for the South was $356,000, up 12.4% from the year before.
- West— existing home sales in August grew 1.1% from July to an annual rate of 880,000, down 29.0% from a year ago. The median price for the region was $602,900, up 7.1% from August 2021.
What can you do?
Keep this data handy and stay up-to-date on market trends and changes in your area. Clients and prospects in your community will rely on experts on the housing market to understand what’s really going on and whether it’s a good time for them to buy or sell.
Be the guide and resource they need, wherever you are, so you can help them make the best decisions for them.