A year of laggard homebuying activity continued in August as the annual pace of existing-home sales slowed to 4 million units, on pace to match 2024’s three-decade low in sales.
New figures from the National Association of Realtors (NAR) show the pace of existing-home sales in August rose 1.8% year over year, however, accompanied by a 2% rise in the median existing-home sales price to $422,600.
“Record-high housing wealth and a record-high stock market will help current homeowners trade up and benefit the upper end of the market,” said Lawrence Yun, chief economist of NAR, in a press release. He added that sales of affordable homes are “constrained by a lack of inventory.”
Yun expects declining mortgage rates and higher inventory levels will boost sales “in the coming months,” despite historical trends of slowing home sales during the winter months.
New homes, for their part, posted a sales surge of 20.5% in August to a seasonally adjusted annual rate of 800,000 units, compared to economists’ projections of 650,000. Offering an affordability edge against existing homes, builders have aggressively offered sales incentives like mortgage rate buydowns and price reductions.
Sales of existing homes rose on a monthly basis in the Midwest (2.1%) and West (1.4%) and fell in the Northeast (4%) and South (1.1%). Sales rose annually in the Midwest (3.2%) and South (3.4%) and fell in the Northeast (2%) and West (1.4%).
The months’ supply of unsold existing homes decreased 1.3% from July to 1.53 million units, or 4.6 months’ supply, up from 4.2 months’ supply a year ago. The monthly contraction in inventory could be due to a rise in sellers delisting their properties in response to tepid demand.
Included in Thursday’s release from the National Association of Realtors, the Realtors Confidence Index for August showed 28% of existing-home sales were to first-time homebuyers, unchanged from July, and 28% of transactions were cash sales, down from 31% in July and up from 26% in August 2024.
