MNI BRIEF: US Existing Home Sales Slipped 2.5% To 3.86M In Aug

U.S. sales of existing homes in August fell 2.5% to a seasonally adjusted annual rate of 3.86 million, the National Association of Realtors said Thursday, below expectations. Sales have been below a pace of 4 million for three straight months and are down 4.2% on the year.

But Lawrence Yun, NAR chief economist, told reporters he is optimistic about the future pace of home sales, pointing to wages that are now beginning to outpace home price growth. "There's a long period where wages needed to catch up with home prices," he said. Since the pandemic, "home prices have risen by 49% nationwide, while wages over that same five year time period grew by 25%. So essentially, home prices cumulatively have outpaced wage gains by roughly a two-to-one ratio."

"It takes several months for the impact of lower mortgage rates to show up on closing activity," he said. "It's just inevitable in several months that we will see an increase in sales."

The national median home price rose 3.1% over the past year to USD416,000, the 14th straight month of year-over-year price gains. The inventory of unsold existing homes rose 0.7% from the previous month to 1.35 million at the end of August, the equivalent of 4.2 months of supply.