The 18% m/m surge in new home sales in August was not enough to outweigh the 1.8% m/m decline in the much larger existing homes market. Strikingly, this decline was due to a weakening in demand from cash buyers and investors triggered by earlier rapid prices gains and the dwindling stock of distressed homes for sale. The share of existing home sales to cash buyers and investors fell from 45% in July to 35% in August. Although first-time and repeat buyers didn’t fill the hole left by cash buyers and investors in August, they are in an increasingly strong position to do so before too long.
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