Despite a decrease in mortgage rates, existing-home sales fell 2.5% in August compared with July to a seasonally adjusted annual rate of 3.86 million, according to the National Association of Realtors.
Year-over-year, existing-home sales dropped 4.2% compared with August 2023.
Driving the decrease was high home prices and lack of affordability: The median existing-home sales price increased 3.1% compared with August 2023 to $416,700, the 14th consecutive month of year-over-year price increases.
Helping to drive up home prices was lack of inventory: Supply increased 0.7% in August compared with July to reach 1.35 million available homes for sale – about a 4.2-month supply at the current sales pace.
Regionally, and month-over-month, existing-home sales dropped 2.0% in the Northeast; 3.9% in the South; and 2.7% in the West. Existing-home sales were flat month-over-month in the Midwest.
Year-over-year, sales slipped in three regions but remained stable in the Northeast.
“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,” says Lawrence Yun, chief economist for NAR, in a statement. “The home-buying process, from the initial search to getting the house keys, typically takes several months.”
“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 adds. “However, in areas where supply remains limited, like many markets in the Northeast, sellers still appear to hold the upper hand.”
Photo: Breno Assis