Deep-pocketed investors appear to be ignoring those “for sale” signs outside U.S. homes.
That’s the take in the National Association of Realtors’ recent report, which showed a surprise 1.8% drop in existing-home sales for the month of August after four consecutive months of gains. The trade organization blamed the decline on a drop in interest from investors that make all-cash purchases, which dragged down overall results. All-cash sales were 23% of transactions in August, dropping for the second consecutive month and representing the lowest overall share since December 2009.
Though the waning interest led to a decline in sales for August, the NAR touted the gradual decline in investor activity, saying it was good for the market as it creates more opportunity for buyers who rely on financing to purchase a home.
“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,” said Lawrence Yun, the association’s chief executive.
The trade organization on Monday reported total existing-home sales dropped to a seasonally adjusted annualized rate of 5.05 million in August from the downwardly revised 5.14 million annual rate in July. Observers had projected a 5.18 million annual rate for August, according to a survey by Bloomberg News.
The housing sector’s recovery has progressed slowly and unevenly. Builder sentiment has improved and inventory has been increasing, but there are still some concerns about underlying demand. Many worry about tight lending standards, which are especially problematic for potential Millennial home buyers that on average hold a lot of student debt. Meanwhile, monthly housing reports recently have fallen short of expectations.
The Millennial factor is especially problematic. As Fortune recently reported, Millennials are finally moving out of their parents’ homes after years of living at home, but they aren’t necessarily buying homes–problematic for the real estate industry as Millennials are a massive demographic group, so its important to get them into the market.
Total housing inventory at the end of the month decreased 1.7% to 2.31 million existing homes available for sale, the association reported. That represents a 5.5-month supply at the current sales pace. However, unsold inventory is 4.5% higher than a year ago.
The median existing-home price for all housing types totaled $219,800 in August, up 4.8% from a year ago. While prices continue to climb, appreciation has slowed recently has inventory has risen.