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The Not-So-Slow Slowdown of Existing-Home Sales

The National Association of Realtors (NAR) reported a decline in the pace of existing-home sales for the second consecutive month in August, down to an annual rate of 5.33 million.

With affordability being a concern in some markets because of price appreciation outpacing wage growth and job gains, on the surface it seems like existing-home sales are down after hitting a post-crisis peak in June.

But when compared with historical averages, things don’t look so bad for existing-home sales, according to NAR’s August 2016 EHS Over Ten Years report. The report showed that the total number of homes sold nationwide in August 2016 was higher than the 10-year August average, as was the total number of homes in all four regions.

“Comparing August of 2006 to August of 2016 fewer homes were sold in 2016 in the US and all regions, the Northeast enduring the biggest decline of 51.4 percent,” said Michael Hyman of NAR. “The U.S. had a drop of 18.9 percent while the West had the smallest drop in sales at 8.3 percent over the 10-year period.”

Meanwhile, the median home price reported for August ($240,200) by NAR was 5 percent higher than the previous August and is higher than the 10-year August average median price nationwide and for all four regions; the West region saw the highest growth from the 10-year national average, with 14 percent. August marked the 54th consecutive month of year-over-year price growth.

Home price growth turned around in 2011, three years after the bubble burst, and has been steadily gaining since August 2012, according to NAR.

“The median price year over year percentage change shows that home prices began to fall in 2008 nationally, and prices dipped by double digits in 2009 for all regions with the West having the biggest decline of 12.3 percent in 2009 after an even larger decline of 23.9 percent in 2008,” Hyman said. “The trend for median home prices turned around completely in 2012, when all regions including the US showed price gains. The following year, 2013, price growth rates peaked and the West had the largest gain in price of 18.3 percent, while the Northeast had the smallest gain at 7.3 percent from 2012 to 2013.”

Click here to view NAR’s August 2016 EHS Over Ten Years report.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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