Sales of existing U.S. homes rose marginally in August but the market continues to be listless. Sales of previously owned homes were up 1.8% from one year ago. Underpinning this stunning lack of movement is data from the National Association of Realtors. This is a drop from July’s sales. The September SAAR is thus currently 4 million units, a drop of 0.2% compared to last month’s estimate. This pace is the slowest since June and marks a continued pattern of lackluster, cooling housing market activity.
The national median sales price for existing homes was up 2% from last August, and is now $422,600. That’s the 26th month in a row of annual price increases, showing continued high demand even as the number of sales continues to decline. The increase of costs appears strikingly. That stands in stark contrast to a housing market that has been plagued by sales declines since the end of 2022.
The sales decline really set in once mortgage rates started rising from record lows earlier in 2022. Recent decreases in mortgage rates have provided home shoppers some welcome relief from high borrowing costs. For most Americans, borrowing costs are still too high to be affordable. Late summer brought a decline in mortgage rates, pushing loan expenses down to their lowest level in 10 months. This adjustment would profoundly increase the purchasing power of first-time buyers. Even with these changes, a lack of overall affordability is still keeping many potential homebuyers on the sidelines.
Meanwhile, sales levels have plummeted to a catastrophic 36-year low. They set new records for the worst in prior-owned housing sales in nearly three decades. 2022 was marked by steep drops in sales as increasing mortgage rates sent many would-be buyers packing. August’s numbers beat economists’ expectations, coming in at a pace of more than 3.96 million. Yet they continue to point to an ongoing crisis in the housing market.
