Existing home sales fall for the sixth time in 2023
Sales dipped in August but have been relatively stable on average — though well below last year's levels, reflecting high prices and limited supply.
Key points:
- Existing home sales — including single-family homes, townhouses, condos and co-ops — fell 0.7% in August.
- The median sale price remained largely unchanged from the previous month but was up nearly 4% from a year ago.
- Softening of home prices this fall could represent an opportunity for buyers, however.
Existing home sales dipped in late summer, falling 0.7% from July to August, the latest data from NAR reveals. Sales of all existing home types declined 15.3% year-over-year in August to an annually adjusted rate of 4.04 million.
So far this year, sales have been down more often than up, with monthly increases seen only in February and May. But when looking at 2023 as a whole, NAR Chief Economist Lawrence Yun said month-to-month sales have largely been flat.
"Home sales have been stable for several months, neither rising nor falling in any meaningful way," he said. "Home prices continue to march higher despite lower home sales. Supply needs to essentially double to moderate home price gains."
The median price for all existing home types in August was $407,100, only a $400 increase from the previous month, but a $15,400 — or nearly 4% — gain from the year prior.
At the end of August, there were 1.1 million homes for sale, which is a roughly 1% decrease from the previous month and a 14% drop from the year prior. This translates to 3.3 months of supply, which is unchanged from July and up slightly from 3.2 months a year ago.
What do these latest numbers mean for consumers? It certainly makes it tougher for first-time buyers to get into the market, Realtor.com Chief Economist Danielle Hale said.
"These challenges may further tip the already-tilted scales for potential first-time homebuyers further toward renting," she said. "Already, rising homebuying costs and falling rents have tipped the monthly rent vs. buy tradeoff in favor of renting in the overwhelming majority of the 50 largest metropolitan areas."
But there could be opportunities for buyers going into a slower, less competitive autumn season where homeowners are more realistic about prices.
"Fall could bring a softening of home prices as more buyers bow out but low inventory precludes major price corrections in most markets," said Bright MLS chief economist Dr. Lisa Sturtevant.
Sales lackluster across regions, but prices still rising
Declining sales don't appear to be stemming price increases.
Sales were flat in the Northeast, yet median prices rose 5.8% year-over-year. And in the South, where sales saw a modest 1% gain in August, prices were up even more, climbing 6.8% from a year prior.
Even in regions that saw declining sales, prices did not follow suit. Existing home sales dipped 1.1% in the South, while prices rose 3.2% over last year. Some of expensive metros in the West — where sales fell 2.6% in August — have experienced price drops, but across the region overall, prices were still up 1% year-over-year.