Home Sales Down 6%, First Decline In 15 Months

Seasonally-adjusted home sales were down 6% year-over-year in August, according to new data released by Redfin Corp RDFN, marking the first annual decline in home sales since May 2020. Home sales were also down 1.4% from July.

What Happened: Home sales recorded a year-over-year decline last month in 44 of the 85 largest metro areas tracked by Redfin, most notably in New Orleans (-23%), Salt Lake City (-16%) and Warren, Michigan (-14%). For the markets that saw year-over-year sales increases, the greatest gains in August were found in New York City (+65%), Honolulu (+47%) and Nassau County, New York (+32%).

Seasonally adjusted active listings were down 19% year-over-year in August, the smallest decline since April, while seasonally adjusted new listings of homes for sale were down 6%, the first decline since February. And while August’s $380,271 median home sale price in August was 16% higher from one year earlier, it was also the lowest growth rate since February.

Related Link: EXCLUSIVE: Housing Economist Danielle Hale On The Supply-Demand Imbalance Facing Homebuyers

What Else Happened: While home sales were in decline, tenants in rental units found themselves paying more for their housing. Realtor.com reported the median rental price reached a new high of $1,633 in August, up 11.5% from one year earlier and the first double-digit annual growth in two years. Annual rent growth has also tripled since the onset of the pandemic March 2020 (+3.2%).

All unit sizes tracked by Realtor.com recorded new rental price highs in August: Two-bedrooms at $1,828, one-bedrooms at $1,524 and studios at $1,338.

Rents posted double-digit gains over last year in more than half of the 50 largest metros, led by Tampa (+30.6%), Riverside, California (+28.6%), Miami (+27%) and Phoenix (+25.5%).

“Put simply, August trends suggest rents are making up for lost time,” said Realtor.com Chief Economist Danielle Hale. “Rents remained low during some of the worst months of the pandemic, growing at a sub-2% pace from September 2020 to March 2021, which is also when for-sale home prices were growing by double-digits.

“Now we've reached a stage in the COVID recovery where people are ready to move, and we're seeing urgency to find new living spaces immediately,” she added. “A lot of this demand can be attributed to vaccines opening up offices and city-life, young adults feeling more confident to strike out on their own, and homebuyers needing to take a break from the red-hot housing market — and many are willing to pay top dollar to make that happen quickly, which may lead to even more growth in rents over the next few months.”

Realtor.com is operated by Move Inc., a subsidiary of News Corp NWSA.

Photo: Mohamed Hassan from Pixabay.