The number of existing homes being sold in the U.S. dropped by nearly 20% in August 2022 compared to August 2021, according to a new report from National Association or Realtors.
The group said that there was a seasonally adjusted annual rate of 4.80 million homes sold, down from 5.99 million a year ago.
With the Federal Reserve raising interest rates again on Wednesday, it is expected sales of existing homes will continue to decline.
"The housing sector is the most sensitive to and experiences the most immediate impacts from the Federal Reserve's interest rate policy changes," said NAR Chief Economist Lawrence Yun. "The softness in home sales reflects this year's escalating mortgage rates. Nonetheless, homeowners are doing well with near nonexistent distressed property sales and home prices still higher than a year ago."
The NAR reported a 7.7% increase in median existing home prices from a year ago.
However, there is an indication that prices might be starting to cool.
After reaching a peak of $413,800 in June, the median existing-home price in August was $389,500.
The NAR noted that there is a seasonal trend of prices declining during the summer.
"In a sense, we're seeing a return to normalcy with the homebuying process as it relates to home inspections and appraisal contingencies, as those crazy bidding wars have essentially stopped," said NAR President Leslie Rouda Smith.