According to the National Association of Manufacturers’ (NAM) Monday Economic Report for this week, existing home sales fell 0.7% from 4.07 million units at the annual rate in July to 4.04 million units in August, the lowest since January. With sharply higher mortgage rates, homeowners are less willing to sell their existing homes, limiting inventories for sale. On a YoY basis, existing home sales have plummeted 15.3% from 4.77 million units in August 2022. 

There were 3.3 months of unsold inventory of existing homes for sale on the market in August, the same pace as in July and continuing to trend higher from 2.6 months in February and March. The median sales price, however, was $407,100 in August, up 3.9% from one year ago.  

Homebuilder sentiment also declined in September. The Housing Market Index fell from 50 in August to 45 in September, suggesting that builders felt more negative than positive in their assessments of the sector. The reduction in optimism stemmed from higher interest rates, with the average 30-year fixed-rate mortgage hovering near 21-year highs.  

In September, the index of current activity for single-family homes declined from 57 to 51, a five-month low, and the index for expected single-family sales slipped from 55 to 49, the lowest reading since March. At the same time, the traffic of potential buyers remained very weak, dropping from 35 to 30, a seven-month low.