A cooling trend in the housing market continued in August with diminished inventory levels being the primary driving force behind the decline. Despite near rock-bottom mortgage rates and healthy job growth, home sales eased after reaching record-setting levels in June. Affordability concerns have delayed some first-time buyers, which could contribute to pent-up demand in the future.
Interest Rates
Interest rates remain near all-time lows. Mortgage rates have remained relatively flat; however, Fed Chair Janet Yellen has suggested that an increase in the interest rate may be coming this December.
Home Sales
The National Association of REALTORS® reported home sales at a seasonally adjusted annual rate of 5.33 million homes during the month of August. This was a decrease of 0.9 percent from July, and an increase of 0.8 percent from August of last year.
Home Prices
The median home price decreased to $240,200 in August, which was down 1.3 percent from July and up 5.1 percent from August of last year. The median home price has increased by nearly $11,700 in the past year alone.
Inventory
There was a 4.6-month supply of housing inventory in August, which was a 2.1 percent decrease from July. The total number of homes for sale decreased by 9.8 percent compared to August of last year.
