Existing Home Sales Remain Flat in August as Inventory Tightens
Existing home sales were largely unchanged in August, registering a seasonally adjusted annual rate of 4 million units, according too the National Association of Realtors (NAR). This represents a slight 0.2% decrease from July but a 1.8% increase compared to August of the previous year. The Midwest region experienced the strongest sales, while the Northeast lagged behind.
These figures reflect closings from deals finalized in June and July, a period when mortgage rates were approximately 50 basis points higher than current levels. The recent decline in mortgage rates at the beginning of September will not be reflected in this data.
A divergence is apparent within the market, with higher-priced homes outperforming those at the lower end. Sales of homes priced above $1 million rose 8% year-over-year, leading all segments. Conversely, sales of homes under $100,000 declined by over 10% compared to a year ago.
“Record-high housing wealth and a record-high stock market will help current homeowners trade up and benefit the upper end of the market. However, sales of affordable homes are constrained by the lack of inventory,” explained Lawrence Yun, NAR’s chief economist.
The Midwest proved to be the strongest performing region in August, attributed to its more affordable market conditions. Median home prices in the Midwest were 22% below the national median price.
Supply, a key factor in the current market, experienced a shift.After increasing earlier in the year, inventory fell 1.3% in August from July,although it remains 11.7% higher than in August of the previous year. This marked the first monthly decline in supply since the beginning of the year.Sellers, responding to softening prices and elevated mortgage rates, are either withdrawing listings or delaying them. The available supply represents 4.6 months, considered a lean market.
the limited supply is contributing to continued price growth. The median existing-home price in August was $422,600, a 2% increase from a year ago, marking the 26th consecutive month of annual price gains.
Homes are taking longer to sell,averaging 31 days on the market in August,up from 26 days in August 2024. first-time homebuyers represent a historically low 28% of sales, while all-cash buyers account for 28% of transactions, up from 26% a year ago.
