ARLINGTON, Va.—Existing home sales fell 0.7% in August to a seasonally-adjusted annual rate of 4.04 million units, representing a 15.3% decrease in sales versus a year ago.
“In August, existing home sales continued to decline, but appear to be holding steady around four million units. Low sales coincide with high mortgage rates that in August averaged 7.07%,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Although the Fed put a pause on rate hikes, the latest projection sliced in half the number of anticipated rate cuts in 2024 from four to two. A dearth of inventory continues to plague the market. The median sales price rose in August due to the lack of supply propping up price levels.”
In August, sales fell in the West (-2.6%), followed by the South (-1.1%). Sales rose in the Midwest (1%) and stayed flat in the Northeast, according to the new data.
Based on current sales, there were nearly 3.3 months of supply at the end of August. Analysts consider six months of inventory a rough balance between supply and demand, Long noted.
The median existing home price, not seasonally-adjusted, rose 0.3% in August to $407,100, a 3.9% increase versus a year ago.
The ‘Binding’ Constraint
“With the labor market gains slowing in recent months, personal savings rate declining, wages outpaced by inflation, and real consumption rising while real disposable income falls, there are signs that demand may begin to weaken,” Long stated. “However, supply will continue to be the binding housing constraint for the foreseeable future. NAFCU expects tepid but stable home sales growth to continue.”
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