On the flip side, August data also reports an earlier than usual seasonal slowdown in the national median listing price as consumers react to news of economic uncertainty, according to a Realtor.com news release.
“The state of the housing market as we head into the latter half of 2019 is a tug of war between increased affordability and economic anxiety. We’re starting to see this tension play out in our August data,” said George Ratiu, senior economist for realtor.com in the release. “On the one hand, lower interest rates have given buyers more purchasing power, which is contributing to August’s decline in national inventory. However, concerns over trade wars and cutbacks in corporate spending are causing some buyers to postpone their search. This is contributing to both the slow down in prices, as well as the inventory decline, as buyers stay put in their current homes.”
In the spring, realtor.com predicted U.S. inventory would decline in fall 2019. As lower than expected mortgage rates merged with rising wages, buyers snapped up existing homes and prompted an early arrival in August of a 1.8 percent decline.
The U.S. median listing price in August was $309,000, still 4.9 percent higher than a year ago, but 1.8 percent lower than July — the largest decrease from July to August since 2012. Usually, home prices go up from June through September. However, July to August declines do happen, the size of this decrease points to an earlier than usual deceleration of prices, likely due to recent concerns over economic uncertainty.
This data is consistent with the findings of realtor.com’s August 2019 home shopper survey, which said that 11 percent of buyers expect a recession by the end of 2019, and 33 percent expect one in 2020. If a recession happens, 56 percent of home shoppers said they would put a hold on searching for a house until the economy recovered.
According to Ratiu: “These strong but opposing forces make it more difficult to predict what will happen in the second half of this year. If the headwinds of economic uncertainty intensify, it could prompt a decrease in buyer demand and shift housing inventory’s current trajectory. But if increased purchasing power prevails, we could see even more inventory declines and intensified competition between buyers.”
The median age of U.S. inventory in August reached 62 days. The typical property spent three days longer on the market versus last August and four days longer than July.
For more information on realtor.com’s August monthly data report, please visit realtorcom.