by Calculated Risk on 9/20/2017 11:26:00 AM

Earlier: NAR: "Existing-Home Sales Subside 1.7 Percent in August"

First, as usual, housing economist Tom Lawler's estimate was much closer to the NAR report than the consensus. So the decline in sales in August was no surprise for CR readers.

Inventory is still very low and falling year-over-year (down 6.5% year-over-year in August). Inventory has declined year-over-year for 27 consecutive months.  I started the year expecting inventory would be increasing year-over-year by the end of 2017. That now seems unlikely (but not impossible).

Inventory is a key metric to watch.  More inventory would probably mean smaller price increases, and less inventory somewhat larger price increases.

The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Click on graph for larger image.

Sales NSA in August (535,000, red column) were below sales in  August 2016 (539,000, NSA).

Sales NSA are now in the seasonally strong period (March through September).

Note: Existing home sales will be weak in the hurricane damaged areas in September.