Sales were bad in all regions. But mortgage rates in August were still quite a bit lower than now.
By Wolf Richter for WOLF STREET.
Pending sales of existing homes for July were revised down today to the second-lowest in the data going back to 2010, just a hair above the all-time low set in January. And August sales edged up from this downwardly revised July to the level of the originally reported July – that’s how deep in the mud sales have been stuck.
Compared to the already stuck-in-the-mud levels in August last year, sales dropped by 4.7%, seasonally adjusted, and by 4.9% not seasonally adjusted, according to data from the National Association of Realtors today.
Compared to August 2021, pending sales have collapsed by 39%, compared to 2020 by 45%, and compared to the Augusts in 2019 and 2018 by 33% and 32% respectively. Compared to August 2010, during the Housing Bust, and the first August in the data, sales were down by 13%.
The NAR’s metric of pending home sales tracks contracts that were signed in August but that haven’t closed yet and could still get canceled. The rate of cancellations has been running high. Pending home sales are a preview of what is coming in terms of closed home sales.
Sales volume has remained mostly below the lows of the Housing Bust for nearly four years – September will complete of the fourth year – after the home-price explosion from mid-2020 through mid-2022 created what is now called an “affordability crisis” amid home prices in many markets that no longer make economic sense.
Amid soaring supply.
The collapse in sales has triggered the highest supply of existing homes in over 10 years, according to separate data from the National Association of Realtors:
Pending home sales by region.
In the South, pending sales rose by 2.3% in August from July, the second-lowest on record, seasonally adjusted.
Compared to August in prior years:
- 2025: -3.8% (year-over-year)
- 2024: +1.1%.
- 2023: -2.4%
- 2022: -17.9%
- 2021: -38.0%
- 2019: -20.9%.
In the West, pending sales rose by 3.3% in August, to the second-lowest volume in the data, after plunging in July to a record low, seasonally adjusted.
Compared to August in prior years:
- 2025: -6.7% (year-over-year)
- 2024: -8.3%
- 2023: -3.9%
- 2022: -24.2%
- 2021: -47.5%
- 2019: -44.2%.
In the Midwest, pending sales fell by 1.6% month-to-month, seasonally adjusted.
Compared to August in prior years:
- 2025: -4.9% (year-over-year)
- 2024: +0.7%
- 2023: -0.7%
- 2022: -18.2%
- 2021: -35.6%
- 2019: -27.6%.
In the Northeast, pending sales fell by 4.2% month-to-month, seasonally adjusted.
Compared to August in prior years:
- 2025: -3.9% (year-over-year)
- 2024: -0.8%
- 2023: -2.2%
- 2022: -19.5%
- 2021: -34.9%
- 2019: -33.7%.
30-year fixed mortgage rates rose to a weekly average of 6.95% in the latest reporting week, according to Freddie Mac today.
The daily measure by Mortgage News Daily has been above 7% for several days and today is at 7.19%.
In August, when the contracts for these pending sales were signed, mortgage rates were still in the 6.5% to 6.7% range, per Freddie Mac data, and in the 6.7% to 6.8% range per Mortgage News Daily data.
Mortgage rates have been in the 6% to 8% range since September 2022.
These mortgage rates are in the lower portion of the range that prevailed in the decades before 2009, before the Fed’s QE and zero-interest-rate policy began to distort the markets.
So today’s mortgage rates are not too high. What’s too high is inflation and home prices after the home-price explosion from mid-2020 to mid-2022. These high home prices have inflated homeowners’ insurance premiums property taxes, and other carrying costs that drain consumer spending elsewhere, and have become a liability for the housing market and for the economy.
In case you missed it: Inventory of New Single-Family Homes Jumps, Prices Drop to Lowest since 2021, Sales Sag
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If I listen to any RE shills and their date the rate, marry the house BS, 3+ yrs later, this whole dating is turning into some serious abusive relationship…meanwhile the RE agent long made off with the commission at the top…
Oh I LOVE what you said out loud!!!
I hear you but sellers have been in the driver’s seat for years. The $500k married couple cap gains exemption turned primary homes into rigged slot machines. Yet I never hear sellers complaining for some reason….just blaming agents. For marginally savvy “investors” there are more tax avoidance rules baked into real estate tax law that any single person could ever understand. Ironically, I never hear much complaining about those schemes either.
“he rabbit done died” on “date the rate,” leading to a shotgun marriage to “Hell House.”
*The, not he
“So today’s mortgage rates are something close to a normal range or even low in a historical context. They’re not too high. What’s too high is inflation and home prices after the home price explosion from mid-2020 to mid-2022. These high home prices have inflated homeowners’ insurance premiums property taxes, and other carrying costs that drain consumer spending elsewhere, and have become a liability for the housing market and for the economy.”
Pretty much say’s it all…