Home sales in August decline unexpectedly, setting a new price record.

• In August 2023, home sales were 4.2% lower compared to the same month in 2022.
• At the conclusion of August, there were 1.35 million units available for purchase, representing a 0.7% increase from July and a 22.7% rise in comparison to the previous year.
• In August 2023, the median price of an existing home sold increased by 3.1% to $416,700 compared to the previous year.

The National Association of Realtors reported that sales of previously owned homes decreased by 2.5% in August compared to July, reaching a seasonally adjusted annualized rate of 3.86 million units.

Sales were 4.2% below the expected level in August 2023. This is the third consecutive month that sales have fallen below the 4 million mark, annualized.

The average rate on the popular 30-year fixed loan decreased from 7% in mid-June to 6.7% by the end of July, according to Mortgage News Daily.

"Lawrence Yun, NAR's chief economist, stated that although home sales were disappointing in August, the recent development of lower mortgage rates and increasing inventory will create a favorable environment for sales to increase in the future months. The home-buying process usually takes several months from the initial search to obtaining the house keys."

The number of homes for sale increased by 0.7% from July to August, and is 22.7% higher than the same time last year. Despite this, the inventory remains at a 4.2-month supply, which is still below the 6-month balance between buyers and sellers.

"In markets with limited supply, like many in the Northeast, sellers still hold the upper hand despite the rise in inventory and accompanying months' supply, indicating that home buyers are in a much-improved position to find the right home at more favorable prices, Yun added."

The high demand for homes is driving up prices. In August 2023, the median price of an existing home sold was $416,700, a 3.1% increase from the same month in 2023. This is the highest price ever recorded for August.

The median home sale price in August was $650,000, with a significant increase in sales for homes priced above $750,000 and a decrease in sales for homes priced below $500,000.

In August, first-time buyers accounted for 26% of sales, the same as the all-time low recorded in November 2021. Meanwhile, all-cash sales were at 26%, a slight decrease from the previous year but still above average.

In August and September, mortgage rates decreased, and the current 30-year fixed rate of 6.15% is the lowest in approximately two years.