Throughout September, the latest August home sales data reflected a strong sensitivity to mortgage rates. When rates experienced a short-lived dip in August, home sales reacted with a sudden jolt of activity.
However, September 2022 closed out with mortgage rates hitting their highest levels since 2007. Thus, the real estate will be sure to compensate with the next round of real estate reporting.
Existing August Home Sales Marked 7-Month Drop
While existing home sales surged briefly, the final tally on September’s data showed the seventh straight month of declines. With this latest news, existing August home sales fell to their lowest level since 2015, dropping 20% since the same period last year.
However, the median existing-home price of $389,500 rose 8% over the prior year. Despite the growth, the latest data marks the smallest annual rate of increase since early 2020. Regardless, the median existing-home price still falls short compared to its record high in June of $413,800.
New August Home Sales Climb Far Above Consensus Forecast
On a more positive note, new August home sales soared 29% from July to August. At 685,000 sales, this result far exceeds the consensus forecast for a miniscule decline. Resembling the existing home sales data, this also falls far from a peak earlier in the year. In fact, January 2021 brought in an annualized rate of 993,000.
Along this vein, the median price of a new home saw an 8% annual increase to $436,800. Just like with existing home sales, this represents the smallest annual rate of increase since November 2020.
Challenges to a Faster Pace of New Construction
Although the August home sales data broke some of the mold, housing inventory remains a long-held obstacle for the real estate market. Currently, housing inventory remains at a 3.2-month supply nationally. Analysts use 6.0 to represent a healthy balance between buyers and sellers.
Furthermore, the vast majority of recent housing starts consisted of multi-family units as opposed to single-family homes. Looking ahead, home builders point to rising construction costs and limited supplies as major challenges ahead.
For insight on the latest home sales data, contact the title and escrow specialists at Plymouth Title Guaranty Corporation.
Information accredited to MBSQuoteline.
Please note: The safety of our staff and clients is our highest priority. Effective immediately, Plymouth Title Guaranty Corp. will be taking the following precautions to limit the spread of the COVID-19 virus:
All purchase transactions need to take place at a Plymouth Title Guaranty Corp. closing office.
- If a party to the closing is not feeling well, please contact your closer before the closing so appropriate precautions can be taken.
- We ask visitors to utilize the restroom in our building upon arrival to thoroughly wash their hands before entering our office.
- Only individuals required to sign and/or deliver documents at closings will be allowed in our office. Specifically, closings will be limited to borrower(s), seller(s), agents, and lenders.
- All pens used in the closing will be given to the client after use.
- All closing rooms will be cleaned and disinfected in-between each closing.
- Those picking up checks at our office will be instructed to call our main line and request to speak to a staff member who will plan for delivery to the lobby or parking lot of our office.
- All staff will refrain from shaking hands before or after closings and ask clients to do the same.
Please be advised that our staffing may be impacted during this unprecedented event. While we are committed to continuing to provide outstanding service, we ask for your patience in the face of this pandemic.