Supply of homes “needs to essentially double to moderate home price gains,” Says NAR Chief Economic Economist Lawrence Yun.

The shortage of housing continues to increase the cost of homes, and buyers are willing to spend more. The median price of homes for all types of accommodation in August topped $407,100 throughout the country, which is a nearly 4 percent rise over the same month an earlier year, The National Association of REALTORS(r) reported on Thursday. It is also three consecutive months in which median sales prices that exceed $400,000. In addition, the four main regions in the U.S. are reporting price rises.

“Home prices continue to march higher despite lower home sales,” states Lawrence Yun, NAR’s chief economist. “Supply needs to essentially double to moderate home price gains.”

The housing inventory at the end of August had dropped approximately 14% when compared to the levels of last year, which were previously low, according to the NAR’s report. Inventory that is not sold as a 3.3-month supply with the current rate of sales, and economists generally say that a five- or six-month rate indicates an equilibrating market.

The handful of houses that are available for sale tend to sell quickly. Seventy-two percent of the homes sold in August remained available in less than one month in the report of NAR. In August, homes typically stayed on the market for only 20 days.

Home Sales Are Moderating

However, the home sales are slowing because of the shortage. NAR announced that the total of existing home sales, which include completed transactions for townhomes, single-family homes, condos, co-ops, and townhomes–decreased by 0.7 percent in August, in comparison to July. Sales were lower by 15.3 percent from the previous year’s high-volume pace.

But, “home sales have been stable for several months, neither rising nor falling in any meaningful way,” Yun declares. “Mortgage rate changes are likely to have a significant impact in the short term, and jobs growth will be steady and positive effect over the long-term. The South saw a slight drop in sales compared to the previous year because of a increased job growth across the region after the release of the lockdown on pandemics.”

With the rise of the rate of mortgages, which have been between 7% and 7% over the past five weeks, cash sales are on the rise. NAR’s data states that all cash sales were responsible for 27 percent of transactions in August, an increase from 24% one year ago. Second-home buyers and investors who are individuals are the ones who are the largest portion of cash transactions. They bought 16% of homes during August.

Regional Breakdown

Here’s a review of how sales of existing homes performed across the nation in August, as per NAR’s most recent report:

• Northeast The sales reached a total of 480,000. This was the same in July. However, they fell 22.6 percent compared to one year ago. Median price: $465,700, increasing by 5.8 percent from a year prior.
• Midwest: Existing home sales increased by 1% when compared with the previous month and reached 970,000 annually. The deals are lower by 16.4 percent from the prior year. Median price: $305,300. An increase of 6.8 percent from August 2022.
• South Revenues fell 1.1 percent from July, resulting in an annual average of 1.84 million. Sales decreased 12.4 percent compared to a year earlier. The median price is $366,100, which is up 3.2 percent from a year before.
• WestSales fell 2.6% in comparison to the prior month, increasing to an annual rate of 750,000. The sales are down 15.7 percent from the preceding year. The median price is $609,300, rising by 1% compared to August 2022.

“There was a historical injustice, and now we need to make things right,” Perez stated. “We should focus on empowering people from the community rather than just sprinkling some equity on it.”