What happened: Existing home sales dropped again in August leading to a full two years of continuous yearly declines in sales.
What Zillow Senior Economist Nicole Bachaud thinks: Sustained affordability challenges in this market have continued to take a toll on existing homeowners and potential homebuyers. Rate lock is still in effect with current mortgage rates sitting above 7% and the majority of outstanding mortgages sitting under 4%, limiting the willingness and ability of existing owners to list their home. WIth such low inventory, the pressure is still up on prices, even as we head into the fall. Median price of home sales was over $400,000 for the third month in a row – record highs in the series. Homebuyers are stuck between high prices and high rates, causing many to be locked out with few affordable options to choose from. Constraints for both seller and buyers are limiting existing home sales. Eyes will still be on the new construction market to fill the gap and provide much needed inventory to help reduce price pressure in the future and pick up the pent up demand that isn’t going anywhere any time soon.