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The American housing market keeps sending mixed signals, and August’s numbers are a masterclass in contradiction. Existing-home sales slipped to 3.98 million units on a seasonally adjusted annual basis, down 2.0% from July and 1.2% lower than the same month last year, according to the National Association of Realtors.
More homes, fewer takers
The inventory picture is where things get interesting. Available homes on the market rose to 1.62 million units, a 3.2% increase from July and 5.9% higher than a year ago. That’s the first time inventory has topped 1.6 million since November 2019, translating to a 4.9-month supply.
For context, a balanced market is generally considered to have about six months of supply. So we’re getting closer to equilibrium, but we’re not there yet.
Meanwhile, the median existing-home price climbed to $429,100, representing a 1.6% annual gain. That marks the 38th consecutive month of year-over-year price increases.
The mortgage rate math
NAR Chief Economist Lawrence Yun put it plainly.
“Mortgage rates and home sales move in opposite directions, so it’s not surprising to see a mild dip in home buying activity due to high mortgage rates.”
The regional breakdown reinforced the broader trend. Sales declined across the Northeast, Midwest, and South, while the West managed to hold steady on a month-over-month basis. No region posted meaningful gains.
Still, the year-to-date picture isn’t entirely bleak. Cumulative sales through August are running 1.6% ahead of the same period last year.
Jobs and wages provide a floor
Wages grew 3.1% in August, and employers have added 643,000 net new jobs so far this year. Those two data points act as a counterweight to mortgage-rate pressure, giving at least some buyers the financial confidence to pull the trigger on a purchase.
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