Open house for prospective buyers in West Hempstead (New York) Raychel Brightman/NewsdayRM via Getty Images
According to the National Association of Realtors, August saw a decline in home sales.
The market is cooling, but that's partly due to high prices.
The median home was now at $356,700, an increase of 14.9% over 2020.
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Although the housing market has cooled slightly in recent months, it is still not good news for homebuyers. This is partly due to the fact that prices are still too high for many potential homebuyers.
The National Association of Realtors reported Wednesday that existing home sales dropped 2% in July, after two consecutive months of growth. The report also revealed that August 2020 saw total sales drop 1.5%, from 5.97million to 5.88million.
According to Lawrence Yun, NAR chief economist, the dip in sales coincides closely with rising national housing prices, which Lawrence Yun said is making many buyers pause their search.
Yun stated that potential buyers are actively searching but more cautious about their financial limits and wait for more inventory.
Last month's median home price was $356,700. This is a 14.9% increase over the previous month and the 114th consecutive month of year-over year gains.
Many first-time homebuyers seem to have been excluded from the market by this price rise. They accounted for just 29% of all home sales last month, down from 30% in the previous month and 33% last fiscal year.
NAR's September survey found that nearly 30% of millennials believe student debt is to blame for their decision to delay buying a home. Combining debt with the increasing cost of houses puts millennial buyers at risk.
Ruben Gonzalez, Keller Williams' chief economist, stated that "home prices remain our primary concern as affordability becomes an increasingly challenging challenge, especially for first-time home buyers who haven't had the chance to benefit from the wealth generated by recent surges in home ownership."
Continue the story
There are signs that the market is cooling down.
There is some hope that the affordability crisis will improve.
According to data from Realtor.com, inventory is slowly recovering and smaller homes are gradually gaining more of the market. This could mean that more affordable homes are hitting the market in some markets.
Redfin recently reported that there is less competition for sellers than it was just a few months back. According to the National Association of Home Builders, homes are now spending slightly more time on the market, 16 days average. People no longer cite bidding battles as the reason they can't find the home they want.
In the second half of 2020, there are fewer home tours and mortgage applications than ever.
After the 2020 buying craze, the soaring prices and feverish bidding battles, it appears that the housing market is returning to normal.
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