Sales in the largest segment of the American housing market fell unexpectedly in August as cash investors added fewer homes to their portfolios.
Existing home sales declined 1.8 percent to an annual rate of 5.05 million units reported the National Association of Realtors (NAR) today. It was the first drop in four months but was nonetheless the second best sales pace in eleven months behind July. Economists had forecast a 1.0 percent rise to 5.20 million units. The July sales rate was reduced to 5.14 million annually from 5.15 million on revision.
"There was a marked decline in all-cash sales from investors,” said Lawrence Yun, the NAR chief economist in a prepared statement. "On the positive side, first-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country.”
Sales last month were down 5.25 percent over the 5.33 million pace in August 2013. They slipped 4.46 percent in July.
Individual investors’ purchases accounted for just 12 percent of sales the smallest portion since November 2009. Overall cash sales were 23 percent of transactions, the lowest share since 22 percent in December 2009. First time home buyers were 29 percent of total sales. Distressed homes, foreclosures and short-sales were 8 percent of August sales, down from 12 percent a year ago and the lowest since October 2008.
The median selling price dropped to $219,800 from $221,600 in July. Inventory remained at 5.5 months at the current selling rate, as it was in July and inventory dropped to 2.31 million homes.
Single-family home sales dipped 1.8 percent to a 4.46 million annual pace in August from 4.54 million in July and are now 4.9 percent less than the 4.69 million figure a year ago.
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