• Existing home sales declined 0.2% in August to a seasonally adjusted annual rate (SAAR) of 4.0 million. Existing home sales were up 1.8% from a year ago, according to the National Association of Realtors (NAR).
• Total housing inventory at the end of August increased to 1.53 million units. That’s down 1.3% from July but 11.7% higher than a year ago.
• The median existing-home sales price in August was $422,600,  up 2% from a year ago.

What happened: The National Association of Realtors existing home sales count stayed roughly flat (-0.2%) in August. The pace of home sales remained slightly ahead of last year’s pace, up just 1.8%. In light of fewer homes having come on the for-sale market in August, the total number of homes for sale decreased slightly. Declining for-sale inventory could slow the downward adjustment in home values. Even so, price growth has slowed and Zillow now forecasts the total value of housing transactions in 2025 will be 5.6% higher than in 2024. This is an upward revision from last month’s 4.5% forecast, stemming from marginally higher expectations for sales volume and prices.

Why it matters: Despite lower mortgage rates and a small improvement in housing affordability this year, existing home sales continue to bounce around last year’s bottom. Weak sales are likely due to consumer finances that are increasingly under pressure along with a more sluggish labor market.

Economic uncertainty has been a major headwind this year. Inflation remains stubbornly elevated and income growth is slowing along with sluggish labor demand.

The relaxed pace of sales is expected to continue — Zillow projects existing home sales measured by NAR to total 4.1 million in 2025. This would represent a 0.8% increase from 2024.

While mortgage rates had been on a decline since May, mortgage rates began rising again after the latest Federal Reserve action in September. Stretched housing affordability and a slowing economy are strong headwinds that could hinder improvement in existing home sales.