Contrary to the past few months, the pace of existing-home sales has begun to slow - fewer homebuyers are flooding the market, with the decline led by waning investor activity across the country.
According to the National Association of Realtors, existing-home sales slipped 1.8 percent this August. These properties are made up of single-family homes, townhomes, condominiums and co-ops. Overall, the seasonally adjusted annual rate dropped to 5.05 million, compared to 5.14 million in July. While the current sales pace is the second-best reported this year, it remains 5.3 percent below the level experienced at the same time last year.
In addition to fewer existing homes sold, the median price for this type of property was $219,800 in August, a year-over-year increase of 4.8 percent. NAR also pointed to investor activity as the impetus behind the decline in sales, with fewer professionals buying up existing-homes using cash only.
"There was a marked decline in all-cash sales from investors," explained Lawrence Yun, NAR chief economist. "On the positive side, first-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country."
First-time buyers need financial boost
Bidding wars and high home prices have been serious impediments for first-time homebuyers in today's economy. In fact, many people are turning to their parents as a way to financially afford the costs of homeownership.
According to Bloomberg, parents are increasingly helping out their children - many of whom are dealing with student loans, tough jobs and tight lending rules. Getting this segment into the housing market is vital, however, as first-timers are a driving force behind growth.
"Without them, the recovery's not sustainable," Anika Khan, senior economist at North Carolina-based Wells Fargo Securities LLC, told the media outlet.
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