Lawler: Early Read on Existing Home Sales in August

From housing economist Tom Lawler (see important comments on inventory):

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.90 million in August, down 1.5% from July’s preliminary pace and down 1.2% from last August’s seasonally adjusted pace. Unadjusted sales should show a very small YOY gain, with the SA/NSA difference reflecting this August’s higher business day count relative to last August’s.

Local realtor reports, as well as reports from national inventory trackers, suggest that while the inventory of existing homes for sale remained low last month, the YOY decline in August was significantly less than in July. What this means for the NAR’s inventory estimate for August, however, is unclear.  As I’ve noted before, the inventory measure in most publicly-released local realtor/MLS reports excludes listings with pending contracts, but that is not the case for most of the reports sent to the NAR (referred to as the “NAR Report!”), Since the middle of last Spring inventory measures excluding pending listings have fallen much more sharply than inventory measures including such listings, and this latter inventory measure understates the decline in the effective inventory of homes for sale over the last several months. Having said that, however, it is clear that seasonally adjusted inventories have been trending higher over the past several months.

Finally, local realtor/MLS reports suggest the median existing single-family home sales price last month was up by about 14.7% from last August.

CR Note: The National Association of Realtors (NAR) is scheduled to release August existing home sales on Wednesday, September 22, 2021 at 10:00 AM ET. The consensus is for 5.88 million SAAR.