Although existing-home sales fell again in August, lower mortgage rates and rising supply could propel a resurgence before the year ends.
Existing-home sales retreated 2.5% in August to a seasonally adjusted annual rate of 3.86 million, sliding 4.2% from one year ago, the National Association of Realtors (NAR) reported Thursday. NAR's report was congruent with recent Redfin data.
Year over year, sales decreased in three out of four major U.S. regions, staying the same in the Northeast. On a monthly basis, sales declined in the South, the West, and the Northeast, but remained stable in the Midwest.
“Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months,” said NAR Chief Economist Lawrence Yun. “The home-buying process, from the initial search to getting the house keys, typically takes several months.”
Single-family home sales decreased 2.8% to a seasonally adjusted annual rate of 3.48 million in August, down 3.3% from August 2023. The median existing single-family home price was $422,100, up 2.9% YOY.
On a regional basis, existing home sales fell 2% from July in the Northeast, 3.9% in the South, and 2.7% in the West, remaining unchanged month-over-month in the Midwest.
The inventory of unsold existing homes rose by 0.7% from July to 1.35 million, or the equivalent of 4.2 months’ supply at the current monthly sales pace. Inventory was 22.7% higher than in August 2023.
“The rise in inventory – and, more technically, the accompanying months’ supply – implies home buyers are in a much-improved position to find the right home and at more favorable prices,” Yun pointed out. “However, in areas where supply remains limited, like many markets in the Northeast, sellers still appear to hold the upper hand.”
U.S. home prices grew by 0.5% in August on a seasonally adjusted basis, making the highest monthly jump since April, according to Redfin.
The median existing home sold for 3.1% more this August year over year, for a price of $416,700. This marks the 14th consecutive month of annual price increases.
The median price rose 7.7% YOY to $503,200 in the Northeast; 3.8% to $315,400 in the Midwest, 1.6% to $367,000 in the South, and 2.2% to $622,500 in the West.
