The hot housing market slowed down in August as home prices continue to discourage buyers. Existing sales fell by 2.0% last month, and the housing supply remains tight, declining 13.4% compared to one year ago, according to data from the National Association of Realtors released Wednesday.
Extreme competition has also pushed many prospective buyers out of the market as median house prices increased by 14.9% from a year ago. Data also showed the smallest share of first-time buyers in more than 2.5 years, reports Reuters, and houses continue to sell after only sitting on the market for 17 days.
Single-family sales fell 1.9% and condo/co-op sales dropped by 2.8%. Reuters noted that this decrease in sales coincides with the recent change in homebuyer sentiment. Home resales fell by 1.5% from a year earlier; however, sales are up 16% this year compared to the same period in 2020 and remain above pre-pandemic levels.
As far as home price growth, forecast models show continued, but slower, growth, Fortune reports. The weakest projection is from CoreLogic, showing a 2.7% appreciation within the next 12 months while John Burns Real Estate Consulting and Freddie Mac project home price growth of 4% and 5.3% in 2022.
Despite forecasts of continued growth, it’s expected that the housing market will balance itself out.
“The recent moderation in existing home sales reflects some easing of the buying frenzy that carried over into early 2021,” said Mark Vitner, a senior economist at Wells Fargo in Charlotte North Carolina. “The frantic race for space sent prices soaring. We continue to expect the housing market to move back into balance over the next couple of years.”
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Last updated: September 23, 2021