Cyber-wellness Means Cyber-awareRead more Addressing maternal mental healthcare in AfricaRead more Qatar v. Ecuador to kick off FIFA World Cup 2022™ on 20 NovemberRead more Webb Fontaine Announces Launch of Niger National Single Window (NNSW) to Bolster TradeRead more Ethiopia: Loan from United Nations Fund Allows Food and Agriculture Organization (FAO) to Scale Up Fertilizers for Farmers in TigrayRead more How Choosing the Right Printer Helps Small Businesses and Content Creators to Save Time, Maximise Productivity and Achieve GrowthRead more Eritrea: World Breastfeeding WeekRead more Eritrean community festival in Scandinavian countriesRead more IOM: Uptick in Migrants Heading Home as World Rebounds from COVID-19Read more Network International & Infobip to offer WhatsApp for Business Banking Services to Financial Institution Clients across AfricaRead more

Supply crunch pushes August US existing home prices up

Print Friendly and PDF

Sep 23, 2020 - 07:11 AM

WASHINGTON — US existing home prices shot higher in August amid surging demand as more consumers sought housing to adapt to working from home, a survey released Tuesday said.

That put the squeeze on inventory, which continued to dip as median prices climbed after breaching the $300,000 level for the first time ever in July.

The National Association of Realtors (NAR) said sales rose 2.4 percent from July to a seasonally adjusted annual rate of six million, in line with analysts’ expectations and the highest level since 2006.

Existing home sales took a dive earlier this year as the coronavirus pandemic snarled business across the country. August was the third straight month of growth, boosted by the shift to work-from-home by many professions, as well as the Federal Reserve’s move to keep interest rates low.

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” NAR chief economist Lawrence Yun said, adding “further gains in sales are likely for the remainder of the year” due to low interest rates and increased rehiring of laid-off workers.

Growth was seen in all regions, with the Northeast, home to the worst initial covid-19 outbreak, climbing the most at 13.8 percent. Overall, sales last month were 10.5 percent higher than August 2019.

However total inventory declined 0.7 percentage points from July to 1.49 million units and unsold inventory sits at a three-month supply, compared with a four-month supply a year earlier.

Median home prices jumped 11.4 percent from a year earlier to $310,600, and Joel Kan of the Mortgage Bankers Association warned that gain “is far above income growth and threatens overall affordability — especially for first-time buyers.”

“It’s clear that more inventory is needed to keep home prices from rising too quickly,” he said.

Even with mortgage rates at low levels, Ian Shepherdson of Pantheon Macroeconomics predicted reticent bankers would take some of the wind out of the housing market’s sails in the last months of the year.

“Tightening of lending standards in recent months appears already to be crimping applications, so sales likely will peak around the year-end,” he said.

  • bio
  • twitter
  • facebook
  • latest posts

LMBCBUSINESS.COM uses both Facebook and Disqus comment systems to make it easier for you to contribute. We encourage all readers to share their views on our articles and blog posts. All comments should be relevant to the topic. By posting, you agree to our Privacy Policy. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, name-calling, foul language or other inappropriate behavior. Please keep your comments relevant and respectful. By leaving the ‘Post to Facebook’ box selected – when using Facebook comment system – your comment will be published to your Facebook profile in addition to the space below. If you encounter a comment that is abusive, click the “X” in the upper right corner of the Facebook comment box to report spam or abuse. You can also email us.