Housing Watch

AUGUST HOUSING WATCH

August Marks Third Consecutive Month of Rising Home Sales

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” said Lawrence Yun, NAR’s chief economist.

Demand for homes in Salt Lake County climbed in August, marking three consecutive months of rising sales. The recent rise in home sales has nearly reversed three months of slower sales (March through May) due to the Covid-19 pandemic. Home sales across Salt Lake County increased 2 percent in August. There were 1,828 sales in the month, up from 1,795 sales in August 2019 (revised numbers). Home sales from January through August are down just 2 percent compared to the same eight-month period in 2019. Pending sales (under contract) in Salt Lake County were up 12 percent in August year over year. New listings in the county fell 1 percent to 2,103. The supply of housing inventory fell to 1.5 months, down 40 percent compared to 2.5 months a year earlier. In Davis County, home sales climbed nearly 3 percent to 577 sales in August, up from 563 sales in August 2019. Pending sales were up 9 percent while new listings fell 10 percent for the month. The median sales price of a home in Salt Lake County increased to $385,000 in August, up 12 percent from $345,000 a year ago. In Davis County, the median home price rose to $380,000, up 13 percent from $336,000 last year. Nationally, total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 10.5 percent from a year ago (5.43 million in August 2019), according to the National Association of Realtors® . “Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” said Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3 percent and with continued job recovery.” In August, Utah ranked No. 2 in the lowest unemployment rate of all states, according to the U.S. Bureau of Labor Statistics. Utah’s rate was less than half the national rate of 8.4 percent. The U.S. median existing-home price for all housing types in August was $310,600, up 11.4 percent from August 2019 ($278,800), as prices rose in every region. August’s national price increase marks 102 straight months of year-over-year gains. Scarce inventory has been problematic for the past few years, according to Yun, an issue he says has worsened in the past month due to the dramatic surge in lumber prices and the dearth of lumber resulting from California wildfires. “Over recent months, we have seen lumber prices surge dramatically,” Yun said. “This has already led to an increase in the cost of multifamily housing and an even higher increase for single-family homes.” Yun says the need for housing will grow even further, especially in areas that are attractive to those who can work from home. As highlighted in NAR’s August study, the 2020 Work from Home Counties report, remote work opportunities are likely to become a growing part of the nation’s workforce culture. Yun believes this reality will endure, even after a coronavirus vaccine is available. “Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” he said. “To assure broad gains in homeownership, more new homes need to be constructed.” Properties across the nation typically remained on the market for 22 days in August, seasonally equal to the number of days in July and down from 31 days in August 2019. Sixty-nine percent of homes sold in August 2020 were on the market for less than a month. First-time buyers were responsible for 33 percent of sales in August, down from 34 percent in July 2020, but up from 31 percent in August 2019.