MNI DATA IMPACT: US Aug Existing Home Sales Fastest Since 2006

More buyers flooded the U.S. housing market in August, with sales activity reaching the fastest pace since December 2006 even as supply is less than half of what was available then, according to data released Tuesday by the National Association of Realtors.

The housing market continued to "amaze" last month, NAR chief economist Lawrence Yun said Tuesday on a call with reporters, with existing home sales increasing to a seasonally adjusted annual rate of 6.00 million SAAR from an unrevised 5.86 million in July.

"Clearly the housing market is demonstrating a V-shaped recovery, a super V-shaped recovery," he said. "It is outperforming what happened even before the pandemic."

From a year ago, sales were up 10.5%, the NAR said, and should continue to increase into 2021 on low interest rates and regardless of whether Congress doles out more fiscal aid.

Sales increased in all four major geographic regions in August, up 13.8% in the Northeast, 1.4% in the Midwest, and 0.8% in both the South and the West.

The national median price rose to a new all-time high of USD310,600, increasing 11.4% from one year ago.

That's "very good news for homeowners, but definitely a price sticker shock for buyers, especially first-time buyers," Yun said.

Yun said the NAR expects prices to increase through at least the end of the year, which could hinder homeownership rates in the near future.

"That is why it is critical to have increased supply," he said. "We need to have increased construction to have a sustained supply increase and address affordability."

Still, more expensive homes are moving "much stronger" compared to the rest of the market, he said.

"It is a booming market on the upper-end," he said. "Sales are not occurring in the very low price point because we just don't have the inventory."

Yun said realtors have indicated that pandemic-driven work-from-home flexibility could be driving even more buyers to the luxury housing sector because having an in-home office has become much more desirable than in years past.

That should be a sustained trend, he said, and at-home working will likely remain popular long after the development of an effective Covid-19 vaccine.

"We are moving into a new economy," he said.