Existing Home Sales Fall for Seven Straight Month and Prices Soften

As elevated mortgage rates and higher home prices continue to price out homebuyers and reduce affordability, existing home sales declined for seven consecutive months in August, according to the National Association of Realtors (NAR). All four regions saw double-digit declines for sales from a year ago. Additionally, home price appreciation slowed for the second month after reaching a record high of $413,800 in June.

Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell slightly 0.4% to a seasonally adjusted annual rate of 4.80 million in August, the lowest level since May 2020. The pace of sales has decreased 26.5% this year. On a year-over-year basis, sales were 19.9% lower than a year ago.

The first-time buyer share stayed at 29% in August, consistent with July 2022 and August 2021. The August inventory level fell from 1.30 to 1.28 million units but was unchanged from a year ago.

At the current sales rate, August unsold inventory sits at a 3.2-month supply, unchanged from last month and higher than the 2.6-months reading from a year ago.

Homes stayed on the market for an average of just 16 days in August, up from 14 days in July and down from 17 days in August 2021. In August, 81% of homes sold were on the market for less than a month.

The August all-cash sales share was 24% of transactions, the same share as last month but up from 22% a year ago.

The August median sales price of all existing homes was $389,500, up 7.7% from a year ago, representing the 126^th consecutive month of year-over-year increases, the longest-running streak on record. The median existing condominium/co-op price of $333,700 in August was up 7.6% from a year ago.

Geographically, while existing sales in the Northeast and West grew 1.6% and 1.1% compared to the previous month, sales fell 3.3% in the Midwest. Sales in the South remained unchanged in August. On a year-over-year basis, all four regions saw a double-digit decline in sales, ranging from 13.7% in the Northeast to 29.0% in the West.

The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell 1.0% from 90.7 to 89.8 in July. On a year-over-year basis, pending sales were 19.9% lower than a year ago per the NAR data.