Key takeaways

  • Existing-home sales in August 2024 fell 2.5 percent from the previous month, according to the National Association of Realtors.
  • The nationwide median sale price was $416,700, up 3.1 percent from last year and the highest August median on record.
  • Inventory in August continued to inch up, reaching a 4.2-month supply — a sign that buyers may be gaining more leverage in the market.

The housing market suffered from sluggish sales in August 2024, but home prices remain near record highs, a new report by the National Association of Realtors (NAR) shows. Sales of existing homes fell 2.5 percent from last month and 4.2 percent from a year ago. Meanwhile, the median home-sale price dropped slightly from June’s all-time high but still marked the highest median price on record for the month of August, according to NAR Chief Economist Lawrence Yun.

High mortgage rates had contributed to the slow sales figures, but that picture has changed dramatically. Even before the Federal Reserve announced a half-point rate cut on Sept. 18, mortgage rates had gone all the way from 8.01 percent in Oct. 2023 to 6.20 percent as of Sept. 18, according to Bankrate’s most recent survey of large lenders.

While the drop in mortgage rates should spur sales, it doesn’t happen immediately. For the transactions that closed in August, buyers probably applied for mortgages in June or early July. “That homebuying process takes time — it takes several months,” Yun told reporters Sept. 19.

Home prices are historically high and affordability challenges remain daunting for homebuyers. Lower mortgage rates relieve some of that pain — but they also could lure more buyers into the market, and therefore cause upward pressure on prices.

The fate of the housing market in the coming months will be dictated in part by the direction of mortgage rates. — Mark Hamrick, Bankrate Senior Economic Analyst

“The fate of the housing market in the coming months will be dictated in part by the direction of mortgage rates, as well as the health of the broader economy,” says Mark Hamrick, Bankrate’s senior economic analyst. “The market could benefit from a combination of tailwinds, if they were to develop and are sustained.”

Existing-home sales reverse course

The count of existing-home sales includes all completed resales, including single-family houses, condos, townhouses and co-ops. According to NAR, the number of sales nationally decreased 2.5 percent from the previous month to an annual pace of 3.86 million transactions in August 2024. It’s a 4.2 percent decline from last year.

“Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months,” Yun said in a statement.

Regionally, sales in the Northeast saw a decrease of 2 percent from July and were unchanged from August of last year. In the West, sales fell 2.7 percent month-over-month and 1.4 percent year-over-year. Sales in the South fell 3.9 percent from July and were down 6 percent from last year, and in the Midwest, sales were flat in August but down 5.2 percent from July of last year.

Days on market

Properties typically remained on the market for 26 days in August, up slightly from 24 days in July and 20 days in August of last year. Selling times are a crucial measure at any time of year, but especially during the peak spring and summer selling seasons.

Home prices hit new August record

The nationwide median sale price for existing homes in August clocked in at $416,700. That’s down slightly from June’s all-time high of $426,900, mostly due to seasonality, but it’s still an increase of 3.1 percent from last year and the highest August median on record. This month’s jump marks 14 consecutive months of year-over-year price increases.

“Even though home sales are disappointing, home prices are still setting record highs,” Yun said.

He offered this illustration of the affordability squeeze: From the start of the pandemic, U.S. home prices are up 49 percent, while wages climbed just 25 percent during that time.

All four geographic regions again experienced annual price increases in August. The West continued to have the highest median price by far at $622,500, up 2.2 percent from a year ago. In the Northeast, the median rose 7.7 percent from a year ago to $503,200. The South’s median price rose 1.6 percent to $367,000, and the Midwest’s rose 3.8 percent to $315,400.

First-time homebuyers made up just 26 percent of sales in August, down from 29 percent in July and tying the all-time low. All-cash deals accounted for 26 percent of August sales, relatively flat from July’s 27 percent.

Housing inventory on the rise

On the bright side, the supply of homes for sale is inching higher after being severely low for quite some time. Total housing inventory — the overall number of homes for sale on the market — stood at 1.35 million units at the end of August. That’s up a modest 0.7 percent increase from July but a significant 22.7 percent jump from a year ago. The figure represents 4.2-month supply, which is getting closer to the five to six months typically required for a healthy, balanced market.

The sharp rise in mortgage rates since the pandemic has kept many homeowners from selling. However, Yun expects that “lock-in effect” to fade with the passage of time and a decline in mortgage rates.