National Median Homes Prices Fall for First Time in a Decade

Thinking about applying for a home mortgage? With prices sinking quickly, this could be the ideal time.

The median home price across the U.S. was $225,000 in August, compared with a revised $230,000 in July. Last month marked the first year-to-year median price decline since April 1995; and it was the second-biggest in the survey’s 38-year history.

However, sales of previously owned homes in the U.S. fell less than expected in August, the National Association of Realtors said Monday. Buyers are definitely out there.

Housing resales dropped to a 6.30 million annual rate, a 0.5% decrease from July’s unrevised 6.33 million annual pace. Inventories of unsold homes rose to 3.92 million, a 7.5-month supply at the August sales pace, the most since April 1993.

Such weakness in existing home sales followed a report last week that construction of new homes and apartments plunged by 6% in August, pushing building activity to the lowest level since early 2003.

The housing sector, which had enjoyed five boom years of record sales, has been slowing sharply this year under the impact of rising mortgage rates and a slowing economy. But many see it as a simple re-balancing act, not a major crash.

NAR chief economist David Lereah said an anticipated decline in prices compared with a year earlier has begun and is likely to continue until the end of the year, helping to support sales.

“With sales stabilizing, we should go back to positive price growth early next year,” Mr. Lereah said.

Until then, it’s a buyer’s market. Sellers will need to come down from their asking prices and those with a pre-approved home loan will have the advantage.