Home sales in the U.S. were disappointing again in August, as reported on September 19, 2024. Existing home sales fell by 2.5%, reaching an annual rate of 3.86 million units. Despite a rise in housing supply, house prices remain high, with the median price hitting a record $416,700. However, the recent Federal Reserve rate cut may provide a silver lining for potential buyers.
Key takeaways:
- U.S. home sales dropped 2.5% in August.
- Median home price reached a record $416,700.
- Federal Reserve cut interest rates by 50 basis points.
- Housing inventory increased by 0.7% last month.
U.S. Home Sales Decline Amid High Prices and Increased Supply
In August, U.S. existing home sales fell more than expected, dropping 2.5% compared to the previous month. The National Association of Realtors reported that home sales reached an annual rate of 3.86 million units. This decline comes despite a 22.7% increase in housing supply from a year ago. The median existing home price also rose by 3.1%, reaching an all-time high for August.
Federal Reserve Rate Cut: A Potential Boost for Home Buyers
The Federal Reserve recently cut interest rates by 50 basis points, the first reduction since 2020. This move could lower mortgage rates further, enticing homeowners to list their properties. Many current homeowners have locked in low mortgage rates, limiting the supply of existing homes. Lower borrowing costs may stimulate demand, but it could also keep prices elevated.
Current Market Conditions: What Buyers Should Know
As of August, properties were on the market for an average of 26 days, up from 20 days last year. First-time buyers accounted for only 26% of sales, matching a record low. Economists suggest that a healthy housing market needs this figure to be closer to 40%.
- Average days on market: 26
- First-time buyers at 26% of sales
- All-cash sales down to 26%
- Distressed sales remain at 1%
In conclusion, while home sales were disappointing in August, the Federal Reserve’s rate cut may offer some hope for buyers looking to enter the market.
