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SILVER SPRING, Md. — Sales of existing homes rose 2.4% in August to its highest level since 2006 as the housing market recovers from a widespread shutdown in the spring brought on by the coronavirus outbreak.
The National Association of Realtors said Tuesday that sales rose to a seasonally adjusted annual rate of 6 million homes sold last month. Sales are up 10.5% from a year ago and back to pre-COVID-19 levels of early 2020.
It’s the the third straight monthly gain for sales of existing homes following big, consecutive declines in March, April and May.
The median price for an existing single-family home reached $315,000 in August, up 11.7% from August 2019. Last month was the first time the median price for a home breached $300,000.
Despite rising prices, the lack of available homes has buyers snatching them off the market at faster every month, especially with interest rates settling at historic lows under 3%.
Properties remained on the market for 22 days in August, down from 31 days in August of last year, NAR’s report noted. It said 69% of homes sold in August 2020 were on the market for less than a month.
A lack of available homes has been a problem for years, long before the virus outbreak spooked many homeowners into staying put. The number of property listings for sale in August was 1.49 million units, a decline of 18.6% from this time last year.
Many economists fear the lack of inventory will continue to stoke higher prices, pushing many would-be first-time buyers out of the market. First-time buyers made up about a third of purchases in August, about the same as all of 2019, according to a report from NAR that year. Historically, the Realtor group says, first-time buyers have made up about 40% of the primary residence home buyers in the market.
“This lack of supply continues to push home-price growth higher,” said economist Joel Kan of the Mortgage Bankers Association. “The 11% gain in prices is far above income growth and threatens overall affordability – especially for first-time buyers.”
Regionally, home sales have climbed in everywhere for three straight months when compared with the previous month. Median home prices grew at double-digit rates in each of the four major regions from one year ago.
Sales jumped 13.8% In the Northeast and 1.4% in the Midwest. The South and West saw more modest gains of 0.8% over the previous month.
All four regions saw median price gains of more than 10% from one year ago.
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