August Existing Home Sales: Reversing Some Gains

• August existing home sales fell 2% from July and 1.5% from a year ago, to 5.88 million (SAAR), according to the National Association of Realtors.
• There is a 2.6-month supply of unsold inventory at the current sales pace, unchanged from July but down from 3 months in August 2020.
• The median existing-home price for all housing types in August was $356,700, up 14.9% from a year ago.

Though home sales remain brisk by historic standards, August existing home sales reversed some of the gains made earlier in the summer -- a potential sign of buyer fatigue after months of rock-bottom inventory and lightning-fast home price growth. Still, there are some signals emerging that bode well for both buyer confidence and the kind of balanced market that is likely to keep sales volume high. A growing share of listed homes are undergoing price cuts, and home value growth, while still very fast, was notably slower in August than in July -- factors that could give current buyers and those saving to enter the market in coming months a bit of breathing room. And more inventory is coming: U.S. home builders started more than 1.6 million homes in August (SAAR), up 3.9% from July and 17.4% year-over-year. The market won't turn on a dime, and the prospect of rising mortgage interest rates that could dent home affordability and stubborn sellers slow to adjust to a shifting market are likely to mean that true balance between buyers and sellers remains a ways off.