Final Look at Local Housing Markets in August

Each month I track closed sales, new listings and active inventory in a sample of local markets around the country (over 40 local housing markets) in the US to get an early sense of changes in the housing market. In addition, we can look for regional differences.

After the National Association of Realtors® (NAR) releases the monthly existing home sales report, I pick up additional local market data that is reported after the NAR (and I’m adding more markets). This is the final look at local markets in August.

The big story for August existing home sales was the near cycle low sales volume, and the large year-over-year (YoY) decline in sales. Also new listings were down YoY, but much less than in previous months.

This table shows the YoY change in new listings since the start of 2023. The smaller decline is due to a combination of new listings collapsing in the 2nd half of 2022, and new listings holding up more seasonally than normal (but still historically very low).

Active Inventory in August

Here is a summary of active listings for these housing markets in August.

Inventory for these markets is down 12.8% YoY, a smaller YoY decline than the 15.0% YoY decline for the same markets in July.

Notes for all tables:

1. New additions to table in BOLD.

2. Northwest (Seattle), Jacksonville Source: Northeast Florida Association of REALTORS®

3. Totals do not include Atlanta, Denver and Minneapolis (included in state totals

   

New Listings in August

And here is a table for new listings in August (some areas don’t report new listings). For these areas, new listings were down 10.1% YoY. Potential sellers that are locked into their current homes with the “golden handcuffs” of low mortgage rates has pushed down new listings.

Last month, new listings in these markets were down 22.3% YoY. The decline in new listing in August - for these areas - was much smaller than the YoY decline for the last several months.

This is partially due to the collapse in new listings in the 2nd half of 2022 and also some pickup in new listings. It seems likely new listings will be up YoY later this year, but still at historically low levels.

Closed Sales in August

And a table of August sales.

In August, sales in these markets were down 14.0% YoY. In July, these same markets were down 16.8% YoY Not Seasonally Adjusted (NSA).

Note that closed sales in August were mostly for contracts signed in June and July. Mortgage rates, according to the Freddie Mac PMMS, averaged around 6.7% in June and 6.8% in July.

September sales will be mostly for contracts signed in July and August and mortgage rates averaged 7.1% in August. My early expectation is we will see a somewhat lower level of sales in September on a seasonally adjusted annual rate basis (SAAR) than in August.

This graph shows existing home sales by month for 2022 and 2023. Since sales were declining every month last year, seasonally adjusted, the YoY decline might be less as the year progresses - and sales could be up YoY at the end of 2023 - however, the recent surge in mortgage rates over 7% will impact closed sales in September and October, and it now seems likely that existing home sales will fall below the previous cycle low of 4.00 million in January 2023.

More local data coming in October for activity in September!