- In the face of tightening inventory and worsening affordability, existing home sales dipped for the third straight month in August, falling 1.7% from the previous month, recording a 12-month low. Unless there is a significant boost in inventory in the coming months, expect existing home sales to continue to trail pre-recession levels.
- Faced with fierce competition, stubbornly low inventory and escalating prices, homebuyers have been buying up homes at an unrelenting pace as the share of inventory sold exceeded pre-recession rates. Homebuyers devoured 25.4% of inventory in August despite the obstacles. However, starter homebuyers may find some relief in the fall as Trulia found starter home inventory sees a seasonal peak in October.
- Hurricanes Harvey and Irma will no doubt have an impact on existing home sales over the next several months, especially since the South accounted for 41% of existing home sales in 2016.
While low inventory continues to plague potential homebuyers a small silver lining may be in store for home seekers as we enter the fall months. Trulia’s latest Price and Inventory Watch found that starter home inventory in many markets tends to peak between October and December, preceding a seasonal dip in prices in the winter.
Existing home sales slid for the third straight month in August, reaching a seasonally adjusted rate of 5.35 million. Stifled by declining inventory, this rate is the lowest of 2017 and the lowest since last August. Existing home sales continues to hover below pre-recession levels, at 82.1% of normal, accounting for population.
Homebuyers exhibit unrelenting demand as they take advantage of low mortgage rates, accounting for 25.4% of inventory sold in the face of persistently low inventory and escalating prices.
While the full extent of damage wreaked by Hurricanes Harvey and Irma are not yet known, combined with severely low inventory and steadily increasing prices, existing home sales are likely to be negatively impacted by these natural disasters. The South accounted for 41% of existing home sales in 2016 and through August was on pace to constitute more than 40% of existing home sales this year.
