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Home sales reach a 14-year high in August, with prices hitting a new record

September 22, 2020. Summarized by summa-bot.

Homes in the Southern Highlands master-planned community are seen in this aerial photograph taken over Las Vegas, Nevada, U.S., on Thursday, Sept. 17, 2020. Nowhere is the widening gap between real estate and the real economy more apparent than in Las Vegas, where tourism is in ruins, wages are plunging and home prices just keep rocketing higher. Photographer: Roger Kisby/Bloomberg via Getty Images

Home sales surged to a 14-year high in August as record low interest rates brought homebuyers out in droves and pushed prices to a new record high.

Home sales surged to a 14-year high in August as record low interest rates brought homebuyers out in droves and pushed prices to a new record high.

Existing home sales -- which includes sales of single-family homes, townhomes, condominiums and co-ops -- were up 2. 4% in August from July, to a seasonally-adjusted annual rate of 6 million transactions, according to the National Association of Realtors.

The median price for all housing types was $310,600 in August, up 11. 4% from a year ago when the median price was $278,800.

NAR's chief economist Lawrence Yun said the housing market appears to be in a 'V'-shaped recovery.

"Home sales continue to amaze," said Yun.

Low inventory has challenged the housing market for the past few years, said Yun. But now the situation is even worse due to a dramatic surge in lumber prices and other complications from the California wildfires.

"The combination of high prices and low supply is going to continue to make finding a home an even more difficult task than it already is," she said.

"The combination of higher prices and low supply is shutting many lower-income Americans out of the market, and in some regions with the most expensive housing, even middle-income Americans can't afford a home," said Frick.

A majority of the homes sold in August, 69%, were on the market for less than a month.

"Even continued strong existing home sales don't reflect how high demand is," said Frick.

"Homes on the market are receiving double-digit offers in some areas of the country, and that demand is further reflected in rising prices. "

While individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in August, the higher number of cash offers suggests that home buying is highly competitive, said Yun.

Yun anticipates strong home sales and high prices will continue throughout the rest of the year.

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