Fewer Americans bought homes in August, as investors retreated from real estate and first-time buyers remained scarce. Sales of existing homes (as opposed to new construction) fell 1.8% to a seasonally adjusted annual rate of 5.05 million, the National Association of Realtors said Monday. That snapped a four-month streak of gains. August sales were down from a July rate of 5.14 million, a figure that was also revised slightly downward.
Much of the decline came from the exodus of investors, who had been buying properties in the aftermath of the housing bust and recession. Investors accounted for just 12% of August purchases, compared to 17% a year earlier.
Overall, the pace of home sales has dropped 5.3% year-over-year.
The August figures show that real estate recovery has depended largely on investors and all-cash sales, instead of families looking to purchasing a house. "It is apparent that much of the juice in the existing-home sales market remains centered in all-cash purchases by speculative buyers," said Joshua Shapiro, chief U.S. economist at the consulting firm MFR.
The rebound from the housing bust that triggered the recession has been painfully slow. The share of Americans who own homes has trended downward over the course of the five-year recovery, as more Americans are becoming renters. The ownership rate fell to 64.7% through the middle of this year, down from a peak of 69.2% toward the end of 2004, according to the Census Bureau.
Sales were curbed by winter storms earlier in the year, but began to accelerate through the summer as mortgage rates eased back from 52-week highs. However, the combination of rising home prices last year and sluggish wage growth has limited sales.
Rising prices through much of 2013 and weak income growth priced out many would-be buyers. Only 29% of purchases in August came from first-time buyers, well below the historical average of 40%.
The median sales price has risen 4.8% over the past 12 months to $219,800, but it slipped slightly in August compared to prices in July and June.
Sales of existing homes continue to lag last year's pace of 5.1 million. Annual sales of 5.5 million are consistent with a healthy housing market, according to analysts.
There is a 5.5 month supply of homes listed for sale. The supply has increased over the past year, yet it remains below the standard level of six months.
Sales tumbled 5.1% in the West and 4.2% in the South last month compared to July. Part of that decline was offset by rising sales in the Northeast and Midwest.
Many consider home sales to be the missing link in a solid economic recovery. Federal Reserve Chair Janet Yellen recently told Congress that housing has proven to be disappointing this year.
Indicators heading into the fall and winter are mixed for real estate, however.New home construction plunged 14.4% in August compared with the prior month, the Commerce Department said Thursday. Much of that decline was due to a drop-off in building apartment complexes, but single-family-home construction also fell 2.4%.
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