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Existing home sales fell 0.7 percent in August to a seasonally-adjusted annual rate of 4.04 million units, representing a 15.3 percent decrease in sales versus a year ago. NAFCU Chief Economist and Vice President of Research Curt Long analyzed the report in a new NAFCU Macro Data Flash report.

“In August, existing home sales continued to decline, but appear to be holding steady around 4 million units. Low sales coincides with high mortgage rates that in August averaged 7.07 percent,” said 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 percent), followed by the South (-1.1 percent). Sales rose in the Midwest (1 percent) and stayed flat in the Northeast.

Based on current sales, there were nearly 3.3 months of supply at the end of August. Analysts consider 6 months of inventory a rough balance between supply and demand.

The median existing home price, not seasonally-adjusted, rose 0.3 percent in August to $407,100, a 3.9 percent increase versus a year ago.

“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. However, supply will continue to be the binding housing constraint for the foreseeable future. NAFCU expects tepid but stable home sales growth to continue,” concluded Long.

For more economic updates from NAFCU's award-winning research team, view all of NAFCU's Macro Data Flash reports.