U.S. Existing Home Sales (August 2025)

U.S. existing home sales fall modestly in August

• Existing home sales fell 0.2% month-on-month (m/m) to 4.0 million units (annualized) in August, coming in modestly above the market consensus forecast for a decline to 3.95 million. 
• Sales in the single-family segment fell 0.3%, while sales in the condo/co-op segment remained unchanged at 370k. Activity was mixed on a regional basis, with sales falling 4% in the Northeast and 1.1% in the South, while the West (1.4%) and Midwest (2.1%) showed moderate improvements. 
• Total inventory at the end of August was 1.53 million units, down 1.3% from July but up 11.7% from August of last year. Measured at the current sales rate and seasonally adjusting, unsold inventory stood at 4.3 months' supply, the same as in July, but up moderately from 3.9 in August 2024. 
• Home price growth ticked up to 2% year-on-year from 1% in the month prior. On a seasonally adjusted basis, the median home price increased by 0.6% m/m – showing a mild improvement from the weakness recorded in the first half of the year (seasonal adjustment performed by TD Economics).

Key Implications

• Mortgage rates remained at elevated levels earlier this summer, doing little to improve the pace of existing home sales. Sales have trended at a sub-par 4 million units (annualized) since March. Besides ongoing affordability challenges, the resale home market is likely losing some action to the new home market, where inventories are more abundant and aggressive builder incentives are contributing to a slightly better sales outturn. About two thirds of builders continue to report using sales incentives, while close to 40% report cutting prices recently – the highest level in the post-pandemic period.   
• Mortgage rates have headed lower more recently, with the 30-year fixed rate falling briefly to 6.1% in mid-September before backing up to 6.4% in recent days. The pullback in interest rates will boost affordability and support homebuying over the near-term, but judging from the moderate upticks in weekly mortgage purchase applications, only a moderate improvement in sales appears to be in the cards. This contributes to residential investment being a drag on the economic outlook over the near term (see forecast). 

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