Existing home sales show year-over-year growth again 

Existing home sales have shown year-over-year growth for two consecutive months, as mortgage rates have remained below 6.64% for the same period. However, let’s remember that the bar is very low for yearly growth. In fact, for many months, I’ve said that the reports coming out from June to October — which will be reported from July to November — will have the lowest year-over-year comps in history, so take the growth with a grain of salt. 

However, looking forward, purchase applications have just had their best eight weeks of the year and this data line typically doesn’t reflect in the sales data until 30-90 days later. So we can still see some growth in existing home sales as the year progresses.

We really need 12-14 weeks of consistently positive weekly purchase application data to be a material event and in the last eight weeks we’ve had seven positive and only one negative, marking eight straight weeks of double-digit year-over-year growth. If we can string out four to six more week of positive purchase apps data, we can see some growth from these low levels.

Existing home sales

From NAR: Total existing-home sales for August:

• 0.2% decrease in total existing-home sales, month-over-month to a seasonally adjusted annual rate of 4.0 million.
• 1.8% increase in sales year-over-year.

“Home sales have been sluggish over the past few years due to elevated mortgage rates and limited inventory,” said NAR Chief Economist Lawrence Yun. “However, mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months.”

Earlier this year, I mentioned that if home sales remain steady at around 4 million, we will still see year-over-year growth despite elevated mortgage rates, as our Housing Market Tracker data indicated slight year-over-year increases. It will be interesting to observe how the rest of the year unfolds, especially since the comparisons for November and December will be more challenging. Those results will be reported in December and January. However, for now, sales have done better this year than last year at this time with 1.8% year-over-year growth.

Housing inventory

Inventory in August:

• 1.53 million units: Total housing inventory down 1.3% from July and up 11.7% from August 2024 (1.37 million).
• 4.6-month supply of unsold inventory, no change from July and up from 4.2 months in August 2024.

Housing inventory has decreased slightly with the NAR data and we may have already reached this year’s peak of 1.55 million, as reported by the NAR. The growth of inventory has been one of the best stories in 2025 for the U.S. economy.

However, with our own HousingWire Data on inventory, we’ve seen housing inventory growth slowing since mid-June, while still showing year-over-year gains. We went from 33% year-over-year growth down to 20% the last few months.

Still, the most notable aspect of the housing market has been the increase in inventory, as price growth has cooled and is now showing a year-over-year increase of just 2.2%. Historically, normal inventory levels range between 2 million to 2.5 million. (For context, In 2007, inventory peaked at 4 million.) If current inventory levels remain between 1.52 million and 1.93 million, discussions regarding low inventory will become less relevant, as sufficient supply will be available in the market.

Conclusion

It’s been a good week for housing data, with purchase apps up, new home sales beating expectations, year-over-year growth in existing home sales and inventory up year over year. Considering the real negative take on housing data early in the year, things have improved. When mortgage rates get below 6.64% and head toward 6% the housing dynamics change and 2025 is now the third time since late 2022 that we’ve seen this happen.