The housing market’s struggles continued last month as sales dipped in August with higher mortgage rates and expensive asking prices holding down the level of completed sales.
Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months,” said Lawrence Yun, NAR's chief economist. Overall, there is a 4.2-month supply at the current pace of sales. The housing market is considered balanced if there is a five- to six-month supply.
“Even with these rate reductions, we expect some continued pressure on the housing market. The majority of homeowners are likely to cling to their low-rate mortgages, keeping resale inventory tight and driving more opportunities for new home sales,” said Nirvan Ghosh, a portfolio manager at Palisades Group, a Texas-based real estate investment group. “We anticipate the rate reductions will create a wave in pent-up demand from folks on the sidelines that could further push home prices higher.
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