Key takeaways

  • Existing-home sales in August fell 0.7 percent from July, according to the National Association of Realtors. It’s a 15.3 percent decline from one year ago.
  • The nationwide median sale price is now $407,100, just a few thousand dollars short of the all-time high.
  • Inventory in August stood at a 3.3-month supply, a level considered a seller’s market.

The housing market continued to challenge homebuyers and reward sellers in August, a new report by the National Association of Realtors (NAR) shows. Sales of existing homes — previously occupied properties, rather than newly built homes — continued their long downward slide, dropping 0.7 percent from July as mortgage rates climbed. The number of sales in August was off 15.3 percent compared to August 2022.

Sales are down, people are struggling to buy homes, but prices are going up. — Lawrence Yun, Chief Economist, National Association of Realtors
Despite weak sales volume, home prices rose 3.9 percent from a year ago to $407,100. It was the highest median price for August ever recorded, NAR says, and it’s not far off the all-time high of $413,800 in June 2022.

Lawrence Yun, NAR’s chief economist, said the housing market presents buyers with a challenging combination of high prices and scarce choices. “Sales are down, people are struggling to buy homes, but prices are going up,” Yun told reporters.

Rising mortgage rates have hampered sales — and they could further squeeze sale activity, Yun said. NAR’s August report reflects mortgage rates in July, when buyers were still locking in mortgage rates at less than 7 percent. Now that rates are well above 7 percent, sale volume is likely to fall farther. Yun sees an increasing likelihood that mortgage rates will hit 8 percent by the end of 2023.

“The fate of the housing market in the coming months will be dictated in part by the direction of mortgage rates, as well as the health of the broader economy,” said Mark Hamrick, Bankrate’s senior economic analyst. “The market could benefit from a combination of tailwinds, if they were to develop and are sustained, including easing inflation.”

Existing-home sales continue to decline

The existing-home sales statistic counts all completed sales of non-new-construction homes, including single-family houses, condos, townhouses and co-ops. According to NAR, the number of sales nationally declined to an annual pace of 4.04 million homes in August 2023, well below historical averages.

Regionally, existing-home sales were a mixed bag. The Northeast saw the biggest yearly drop at 22.6 percent, with no change in the past month. In the Midwest, sales rose 1 percent over the previous month but fell 16.4 percent from a year earlier. In the West, sales fell 2.6 percent from July and 15.7 percent annually. And the South saw a 1.1 percent monthly decline and a 12.4 percent yearly retreat.

Days on market

The length of time properties sat on the market in August was 20 days, unchanged from July. Nearly three-quarters of U.S. homes sold in August — 72 percent — were on the market for less than a month, NAR reports.

Median sale prices close to record high

The nationwide median sale price for existing homes rose to $407,100, up 3.9 percent from a year ago. In June 2022, the median price hit its highest-ever recorded price at $413,800. August marks the third consecutive month, and only the fifth time ever, that NAR’s monthly median sale price exceeded $400,000. The U.S. housing market had been on a remarkable run of 131 consecutive months of year-over-year median sale price increases — the longest-running streak since NAR started keeping records — before dropping year-over-year in February of this year.

Regionally, all four regions saw price increases. The West once again has the highest median price by far at $609,300, up 1 percent from a year ago. In the Northeast, the median rose 5.8 percent from a year ago to $465,700. The South’s median price rose 3.2 percent to $366,100, and the Midwest’s median rose 6.8 percent but remains the lowest of the four major regions at $305,300.

Housing inventory remains low

Total housing inventory — the overall number of homes on the market for sale — sat at 1.1 million units at the end of August. That’s a modest decrease from July and represents only a 3.3-month supply, which is well short of the five to six months typically required for a healthier, more balanced market.

“There are simply not enough homes for sale,” Yun said. “The market can easily absorb a doubling of inventory.”

The sharp rise in mortgage rates has kept many homeowners from selling. Those who locked in rates at 3 percent aren’t keen on moving while rates are north of 7 percent. “Rate lock is still in effect with current mortgage rates sitting above 7 percent and the majority of outstanding mortgages sitting under 4 percent,” said Zillow senior economist Nicole Bachaud.