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Existing Home Sales Decline in August; Down 20% Over 2021

 ARLINGTON, Va.—Existing home sales declined by 0.4% in August to a seasonally-adjusted annualized rate of 4.8 million units.

LongCurt

Curt Long

This represents a 19.9% decrease in sales compared to 2021.

“Existing home sales fell for the seventh straight month in August, but by the smallest amount of any month within that period,” said NAFCU Chief Economist and Vice President of Research Curt Long. 

The median existing home price declined by 2.4% in August to $389,500, which Long said is “in line with typical seasonal changes at the end of summer.”

“Inflation and Fed rate hikes have pushed mortgage rates to more than 6%, sidelining many potential buyers,” added Long. “However, supply remains extremely tight, which is supporting current price levels.”

A Quarter’s Worth of Supply

Based on current sales, there were 3.2 months of supply at the end of August. Analysts consider six months of inventory a rough balance between supply and demand.

 “In response to lower demand for homes, renters saw the largest monthly increase in prices since 1991 in August,” said Long. “Homes on the market sold in an average of 16 days last month, which was up 2 days from July, but still down from 17 days in August of 2021.”  

Sales fell in just one region of the U.S., the Midwest (-3.3%). Sales rose in the Northeast (1.6%), as well as in the West (1.1%). In the South, sales remained unchanged.

The Forecast

“NAFCU expects home sales to settle near the current, lower level over the near term as mortgage rates prevent improvement, but a strong labor market and resilient demand prevents further decline,” concluded Long.

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