Existing home sales slipped in August on fewer all-cash sales

Sales of existing homes slipped in August after four months of gains because cash-paying investors pulled back their purchases. 

Total existing-home sales, which are completed transactions that include single-family homes, townhomes and condos, decreased 1.8 percent to a seasonally adjusted annual rate of 5.05 million in August from a slight downwardly revised 5.14 million in July, the National Association of Realtors said Monday.

{mosads}Sales are at the second-highest pace of the year, but are 5.3 percent below the 5.33 million-unit level from last August, which was also the second-highest sales level of 2013.

“There was a marked decline in all-cash sales from investors,” said Lawrence Yun, NAR chief economist.

“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.”

All-cash sales represented 23 percent of transactions in August, dropping for the second consecutive month from 29 percent in July and representing the lowest overall share since December 2009 (22 percent). 

Sales increases in the Northeast and Midwest were outweighed by declines in the South and West.

“As long as solid job growth continues, wages should eventually pick up to steadily improve purchasing power and help fully release the pent-up demand for buying,” Yun said.

The median existing-home price for all housing types in August was $219,800, which is 4.8 percent above August of last year and the 30th straight months of annual price gains.

Meanwhile, inventory declined 1.7 percent to 2.31 million existing homes for sale, which represents a 5.5-month supply at the current sales pace.

The share of first-time buyers remained unchanged in August from July at 29 percent.

Distressed homes — foreclosures and short sales — represented 8 percent of August sales, remaining in the single-digits for the second straight month and down from 12 percent a year ago.

Regionally, August sales were up 4.7 percent in the Northeast and 2.5 percent in the Midwest. 

Sales in the South declined 4.2 percent and were down 5.1 percent in the West.