Existing-home sales decreased 0.7% in August compared with July, according to the National Association of Realtors (NAR), and were down 15.3% compared with August 2022.
The month-over-month drop is hardly significant when considering that existing-home sales have slowed to trickle during the past two years due to rising mortgage rates and lack of affordability.
According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage was 7.18% as of September 14. That’s up from 7.12% the prior week and 6.02% one year ago.
Also stifling existing-home sales are rising home prices: According to NAR’s data, the median existing-home sales price in August climbed 3.9% compared with August 2022, to $407,100.
Keeping home prices artificially high is the lack of inventory: As of the end of August, there were only 1.1 million existing-homes available for purchase, the equivalent of 3.3 months’ supply at the current monthly sales pace.
Among the four major U.S. regions, existing-home sales improved in the Midwest, were unchanged in the Northeast, and slipped in the South and West. All four regions recorded year-over-year sales declines.
“Home sales have been stable for several months, neither rising nor falling in any meaningful way,” says Lawrence Yun, chief economist for NAR, in a statement. “Mortgage rate changes will have a big impact over the short run, while job gains will have a steady, positive impact over the long run. The South had a lighter decline in sales from a year ago due to greater regional job growth since coming out of the pandemic lockdown.”
Photo: Roger Starnes Sr