Flight From the Cities: Existing Homes Sales Jump to 14-Year High

The American home-buying spree showed no signs of abating in August.

Sales of previously owned homes rose 2.4 percent in August to an annualized rate of 6 million, the third consecutive monthly rise, the National Association of Realtors said Tuesday. That is the highest level of home sales since 2006—when the supply of homes for sale was twice as large as today.

Analysts polled by Econoday had been expecting a 1.8 percent climb after the stunning 20.2 percent in June and 24.7 percent in July.

Compared with a year ago, sales are up an enormous 10.5 percent.

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” said Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

A broad range of factors—from looting and rising murder rates to closed schools to working from home and lockdowns of urban amenities such as museums, theaters, and restaurants—has pressed Americans to speed up purchasing plans and pushed renters to decide to become home buyers.

The additional demand is causing a surge in home prices. The median existing-home price for all housing types in August was $310,600, up 11.4% from August 2019. For three straight months, home sales have climbed in every region compared to the previous month. Median home prices grew at double-digit rates in each of the four major regions from one year ago.

Supply is increasingly limited. Total housing inventory at the end of August totaled 1.49 million units, down 0.7 percent from July and down 18.6 percent annually. This is the lowest level of August inventory since the 1990s.

“Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” Yun said. “To assure broad gains in homeownership, more new homes need to be constructed.”

Single-family home sales rose to a seasonally-adjusted annual rate of 5.37 million in August, up 1.7 percent from July, and up 11.0 percent from one year ago. The median existing single-family home price was $315,000 in August, up 11.7 percent from August 2019.