Existing-home sales backtrack slightly in August

U.S. existing-home sales were down slightly in August, slipping 0.2% from July, according to data released Thursday by the National Association of Realtors (NAR).

Sales came in at a seasonally adjusted annual rate of 4.0 million in August, up 1.8% year over year. The national median existing-home price rose to $422,600 in August, a 2% increase from a year ago and the 26th consecutive month of year-over-year gains.

“Home sales have been sluggish over the past few years due to elevated mortgage rates and limited inventory,” NAR chief economist Lawrence Yun said in a statement. “However, mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months.”

NAR’s report showed regional differences as sales increased in the Midwest and West but declined in the Northeast and South.

“Record-high housing wealth and a record-high stock market will help current homeowners trade up and benefit the upper end of the market,” Yun said. “However, sales of affordable homes are constrained by the lack of inventory. The Midwest was the best-performing region last month, primarily due to relatively affordable market conditions. The median home price in the Midwest is 22% below the national median price.”

Fourth-quarter revival?

Jason Waugh, president of Coldwell Banker Affiliates, said that the fourth quarter of 2025 could wind up being peak homebuying season.

“While summer is traditionally considered peak season for home-buying, Q4 emerged as the most active period last year, driven by declining mortgage rates in Q3,” Waugh said in a statement. “Buyers and sellers entering the market now through the end of the year are highly motivated. Navigating seasonal changes such as school schedules, inclement weather, and holiday commitments shows serious intent.”

Waugh noted that sellers who are keeping their homes ready for showings remain dedicated, even as mortgage rates hit their lowest point of the year and improved affordability draws more buyers back into the market.

Total housing inventory stood at 1.53 million units, down 1.3% from July but up 11.7% from August 2024. That represents a 4.6-month supply at the current sales pace, unchanged from July and higher than the 4.2-month supply a year earlier.

“While inventory has plateaued nationally, the pace of new listings is slowing, which may once again tip the scales between buyer demand and available supply,” Waugh said.

In the Northeast, sales fell 4% from July to an annual rate of 480,000, down 2% from a year earlier. The median price in the region climbed 6.2% to $534,200. The Midwest saw sales rise 2.1% to 960,000, a 3.2% gain from a year ago. The median price in the Midwest was $330,500, up 4.5% from last August.

In the South, sales slipped 1.1% to 1.83 million but rose 3.4% year over year. The median price in the region was $364,100, a 0.4% increase. In the West, sales rose 1.4% to 730,000 but were down 1.4% from August 2024. The median price there was $624,300, up 0.6% from a year earlier.

Sales of single-family homes fell 0.3% to 3.63 million but were still 2.5% higher than a year ago. The median price for single-family homes was $427,800, up 1.9% in the past year. Condominium and co-op sales held steady at 370,000, a 5.1% decline from August 2024. The median condo price was $366,800, a 0.6% increase.

Homes typically spent a median of 31 days on the market in August, up from 28 in July. First-time buyers accounted for 28% of sales, unchanged from July, while all-cash deals accounted for 28% and investors were 21%. Distressed sales held at 2%.

The average 30-year fixed-rate mortgage fell to 6.59% in August, down from 6.72% in July, according to Freddie Mac data. A year ago, the average rate was 6.50%.

Transition or emergency?

Bright MLS chief economist Lisa Sturtevant questioned whether NAR’s report “overstates” market strength. While the trade group reported sales rose 1.8% year over year on a seasonally adjusted basis, Sturtevant said actual sales were down 0.8% to their lowest level for August in at least a decade.

Sturtevant noted that reported sales reflect contracts signed 30 to 60 days earlier, before recent declines in mortgage rates. “It may be too soon to tell if declining mortgage rates are bringing out more buyers,” she observed.

The housing market has slowed for more than two years, first because of low inventory and more recently due to high mortgage rates and affordability challenges. Sturtevant said the downturn also reflects normal market cycles after several years of above-average sales.

Sturtevant warned that sluggish sales can hurt household mobility and economic growth by limiting opportunities to relocate for jobs or other needs.

“Does this 2 ½-year period of below-average home sales constitute a ‘housing emergency’? Or are we in a transition period where the pendulum of home sales has swung to one side and now to the other, and we will settle back to normal in the next year or two?” she asked.