• Existing home sales missed expectations in August, falling 1.7 percent from July to 5.35 million units at a seasonally adjusted annual rate (SAAR), the slowest pace since August 2016.
• It was the third consecutive month of declining existing home sales and the third month in a row of existing home sales coming in below forecasts.
• The number of single-family homes on the market fell 2.1 percent in August to 1.54 million units (SAAR), the 27^th consecutive month of declining inventory and the second lowest number since records began in 1982.
• The median price of existing homes sold in August edged higher to $245,000 from $244,600 in July, a new all-time high.

Existing home sales fell in August, declining 1.7 percent from July to 5.35 million units at a seasonally adjusted annual rate (SAAR), according to the National Association of Realtors (NAR). It was the third consecutive month of declining sales – the first time since early 2014 that sales have declined for three months in a row – and the third consecutive month of sales coming in below forecasts.

After showing surprising resiliency through the spring, existing home sales had a disappointing summer. While they appeared to plateau between October and May, they have moved definitively lower since then. Year-over-year, existing home sales are still up – though just barely: 0.2 percent higher than August 2016, which was itself a disappointing month.

The decline was particularly disappointing given low mortgage rates in August. The standard 30-year fixed mortgage rate on Zillow averaged 3.66 percent in August, down from 3.77 percent in July and its lowest average monthly rate since October 2016.

Hurricane Harvey – which hit the Texas Gulf Coast on August 25th – might have delayed some sales and could explain some of the decline nationwide. Home sales in the South (which includes Texas) reported a 5.7 percent monthly decline in sales in August. However, that decline was not much steeper than the month-over-month drop in existing home sales in the West (down 4.8 percent in August), which was untouched by Hurricane Harvey. If sales in the South had dropped at the same pace as those in the West, national existing home sales would have been only 20,000 units higher at 5.37 million units (SAAR) and still would have represented a 1.3 percent monthly decline (compared to a reported 1.7 percent decline). Overall, these data suggest that there was at most a very small adverse effect from Hurricane Harvey on August existing home sales. We expect this effect to be larger in the coming months, particularly in September and October.

For-sale inventory – the number of homes (single-family homes and condos/coops) on the market – fell 1.5 percent in August from July to 1.75 million units (SAAR) and is down 6.5 percent from a year earlier. The number of homes on the market has now been declining year-over-year since June 2015, and there are fewer homes on the market than at any point since this data series began in January 1999. Looking only at single-family homes, for which a longer time series is available, there has only been one month in the past 35 years (the data series starts in June 1982) when there were fewer single-family homes on the market (November 1994). The number of single-family homes for-sale fell 2.1 percent in August from July to 1.54 million units (SAAR) and is down 6.7 percent compared to last August.

The median price of existing homes sold in August touched a new all-time high: At $245,000, the median seasonally-adjusted price of existing homes sold in August was up $200 (0.2 percent) from July and up 5.8 percent from last August.