A lack of housing inventory continues to increase the cost of homes, and buyers are willing to spend more. The median home price for all types of housing in August was $407,100 across the nation, that’s a nearly 4 percent increase over an earlier year, the National Association of REALTORS(r) reported on Thursday. It’s also three consecutive months in which median sales prices exceed $400,000. In addition, each of the four major regions in the U.S. are reporting price increase.

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

Inventory of housing at the end of August had dropped around 14% from the levels of last year that were historically low, as per NAR’s report. Inventory that is not sold has a 3.3-month supply with the current rate of sales, and economists generally say that the five to six-month period indicates a more balanced market.

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

Home Sales Are Moderating

Yet home sales are slowing because of the shortage. NAR said that the number of existing home sales — which reflect transactions completed for townhomes, single-family homes condos, co-ops, and townhomes–slid by 0.7 percent in August, in comparison to July. The sales are lower by 15.3 percent compared to the previous year’s high-volume pace.

Yet, “home sales have been stable for several months, neither rising nor falling in any meaningful way,” Yun states. “Mortgage rate adjustments will be significant in the short-term, while employment gains will be steady and positive impact in the long term. The South experienced a less dramatic drop in sales compared to the previous year because of the greater job growth in the region after the release of the lockdown on pandemics.”

In the context of the rising rate of mortgages, which have been within the range of 7% in the last five weeks, cash sales are on the rise. The NAR report indicates that all-cash sales made up 27 percent of transactions in August, which is up from 24% one year ago. Second-home buyers and investors, who are individuals, typically comprise the majority of cash transactions. They bought 16% of the homes sold in August.

Regional Breakdown

Here’s a look at how home sales were in the United States in August, as per NAR’s most recent report:

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