Home Sales Pace

U.S. existing home sales in August declined 2.2 percent to a seasonally adjusted annual sales pace of 4.91 million units from 5.02 million in July, according to the National Association of Realtors (NAR).The current figures are also down on a year-over-year comparison, falling 10.7 percent from the 5.5 million unit pace of August 2007.

The NAR definition of existing homes includes single-family homes, townhouses, condominiums, and co-ops. The group "seasonally adjusts" the sales numbers to factor in things like inclement weather, school sessions, winter holidays, etc to smooth out the trends. The NAR also describes its sales data based on an annual pace. This means that the monthly figure represents the total number of housing units that would be sold in one year if the current rate were to continue unchanged.

Sales Pace by Region

Regionally, falling monthly sales in the Northeast and the West were tempered with minor gains in the Midwest and the South.

The Northeast experienced a 6.6 percent decrease in sales from July to August and a 15.0 percent drop from August 2007.

The West saw sales fall 5.3 percent in the last month, but was the only region to see a year-over-year rise, as dramatically lowered prices helped work off some of the excess inventory. Home sales there increased 4.9 percent since August 2007.

In the Midwest, homes sales inched up 0.9 percent in August, yet fell 12.3 percent in the previous year.

The South had similar data to report, with a monthly gain of 0.5 percent, but a yearly decline of 15.1 percent.

Home Prices

As of August 2008, the national median home price had fallen 9.5 percent in the preceding 12 months, to $203,100 due to rising foreclosures, increasing inventory, and decreased availability of consumer credit. The median price represents the price that is the midpoint - half of all home sales prices were above the median and half were below. The median generally provides a clearer picture of home prices than the average or mean would.

By region, the median price decreased across the board. The West lead the way, as hefty foreclosure rates created an extremely competitive market, forcing sellers to drastically lower their prices. The median price in the West sank 23.9 percent since August 2007 to $251,600, knocking it out of the priciest region slot. The Northeast now takes that title, where the median home price is $271,000, although it still reflects a 3.8 yearly decline. The median price fell 5.6 percent in the Midwest to $168,000 and the median price in the South dropped 3.4 percent to $176,500.

Inventory

One bright spot in the month's report is that housing inventory is shrinking. In August 2008, there were roughly 4,255,000 existing homes on the market, a 7.0 percent decrease from the previous month and a 2.9 percent decrease during the 12 preceding months. At the current pace, it would take 10.4 months to sell all the available homes for sale at present.

Next Report

Data for September existing home sales, prices, and inventory will be available at the end of October.