According to the National Association of Realtors (NAR), existing house sales fell in August as high mortgage rates and rising home prices continued to deter purchasers.
August sales represented transactions completed in June and July, when mortgage rates were still around 6.5%, some 50 basis points higher than current levels.
Mortgage rates have been hovering between 6.5% and 7% since earlier this year due to persistent economic and trade uncertainty.
However, rates fell below 6.5% for the first time this year in September, as the Fed resumed rate decreases.
The average mortgage rate fell to 6.26% last week, its lowest level since last fall. Lower mortgage rates and improved inventory are projected to attract more buyers and sellers to the market in the coming months.
In August, total existing home sales, which included single-family homes, townhomes, condominiums, and co-ops, decreased 0.2% to a seasonally adjusted annual rate of 4.00 million.
However, sales were 1.8% higher year on year than the previous year.
In August, the existing house inventory stood at 1.53 million units, down 1.3% from July but up 11.7% from the previous year.
At the current sales rate, August unsold inventory is at 4.6 months, the same as in July but up from 4.2 months in August 2024.
A market with inventory of 4.5 to 6 months is generally considered balanced.
Homes were on the market for an average of 31 days in August, up from 28 days last month and 26 days in August 2024.
The share of first-time buyers was 28% in August, steady from July but up from 26% a year ago.
The August all-cash sales percentage was 28% of total transactions, down from 31% in July but up from 26% a year ago. Interest rate adjustments have a lower impact on all-cash buyers.
In August, the median sales price of all existing homes was $422,600, up 2.0% from the previous year. This is the 26th month in a row of year-over-year gains.
In August, the typical condo/co-op price was $366,800, up 0.6% from the previous year.
Recent gains in housing inventory will exert downward pressure on resale home values in the majority of cities in 2025.
In August, existing home sales varied throughout the four major areas. Sales increased in the Midwest (2.1%) and West (1.4%) while decreasing in the South (-1.1%) and Northeast (-4.0%).
Sales increased in the South (3.4%) and Midwest (3.2%) year over year, while they decreased in the West (-1.4%) and Northeast (-2.0%).
The Pending Home Sales Index (PHSI) is a contract-based indicator that forecasts future home sales.
In July, the PHSI decreased from 72.0 to 71.7, indicating that high mortgage rates continued to keep buyers away, despite improving availability.
According to data from the National Association of Realtors, pending sales were 0.7% higher year on year.
[Read more about this topic on Eyeonhousing.org]