The summer is coming to an end, vacation fatigue is setting in, and you are ready to prioritize the planned move before the weather starts to cool down. The academic year is about to begin, and you want to ensure a smooth transition for the kids by having them start the year off in the new school. The few homes you’ve seen thus far have seemed quite pricey, so you are hoping that competition has settled a bit and listings are more aligned with your price range now that many other families have finished their move. These reflections represent the sentiment prospective buyers may be experiencing as the summer progresses and they begin to finalize their plans to move during the season.

These are what we call seasonality trends, patterns we see every year around the same time. They help explain how buyers and sellers usually behave as the housing market progresses through peak sales season and offer useful insight for planning real estate strategies. Buyers and sellers can use these seasonal trends to understand the broader market as they decide how to time their home purchase or listing. It is important to note that the following estimates represent a “normal” pre-pandemic summer (1999-2019). This allows us to compare today’s housing market with what would typically be expected during this time of year.

Supply & Demand

To begin with, we can look at the average number of existing-home sales in August:

  • July: 517,381
  • August: 530,286
  • September: 447,048
  • October: 441,667

Historically, existing home sales spikes by about 2.6% in August, making it the second highest month in terms of sales volume just behind June. This increase represents the final summer push to get into a new home, which motivates prospective buyers despite the elevated prices associated with the season. For many families, August represents the last opportunity to move before the new school year begins, allowing children to settle into a new home before classes start. Additionally, prices tend to see month to month reductions after June, making August the most affordable summer month to purchase a home on average.

The increase in buyers we see in August raises the question: Is the elevated number of listings typically associated with the summer maintained to sustain the spike in demand for homes?

Let’s take a closer look at inventory to further understand supply:

  • July: 2.59 million
  • August: 2.59 million
  • September: 2.52 million
  • October: 2.50 million

These levels reflect typical pre-pandemic summer conditions, well above today’s inventory, which remains below 1.6 million – about a million homes short of what used to be normal.

Inventory typically sees little change in August, placing it alongside July as one of the months with the highest inventory levels on average. Similar to buyers, sellers are likely driven to list by the logistical convenience and favorable timing associated with August. Additionally, sellers may be motivated by relatively high prices during the summer and the expectation that prices will soften as the market heads into the fall. For both buyers and sellers, August represents one of the last opportunities to move before the market begins its seasonal slowdown, helping keep both supply and demand elevated through the end of the summer.

 

 

As the market transitions into fall, home prices typically continue the gradual decline that began in July, falling about 1.2% on average. Despite the seasonal decline, August remains the third strongest month for home prices. Sellers looking to move into their new home before the fall may feel pressure to complete the transaction, motivating them to lower their price in the hopes of a quicker sale. Even though buyer activity remains strong, inventory also remains near its seasonal peak, giving buyers more options and creating competition among sellers. As a result, home prices typically ease modestly in August.

Days on the Market: How Quickly Sellers Can Expect to Find a Buyer

Next, we will look at the number of days a typical home remains on the market to see how market conditions in August impact the time required for a seller to find a deal in the late-summer season.

 

 

Continuing the trend from July, we see a slight increase in the number of days a typical home spends on the market. The uptick is the smallest seen out of all the months and is likely being suppressed by the high buyer demand alongside the continued warm weather and additional daylight characteristic of the season. Despite this, turnover is generally lower than in the spring-summer months, signaling the transition into a slower market.

Buyer Characteristics: Who is in the Market in August?

Lastly, we will look at the share of first-time and cash buyers to get a sense of the typical buyer in the month of August.

 

 

Historically, the share of first-time home buyers decreases by about 0.1 percentage points in August. This demographic is more likely to experience logistical challenges associated with traveling with young children, which may result in a move earlier in the summer to allow for more buffer time between the move and the beginning of the school year. At the same time, first-time home buyers still face some of the highest prices in the year despite the fact that home prices typically ease from their seasonal peak, suggesting that some of them may choose to postpone the search altogether until prices come down further later in the year.

The share of cash buyers remains relatively the same when compared to July. While this demographic typically increases slightly in July from June, there is no further increase in August. Since prices tend to ease gradually from their seasonal high in June, cash buyers, including investors, may not yet see enough of a price adjustment to increase their activity.

In August, REALTORS® can expect to see a bump in transactions associated with the push to get into a new home before the school year kicks off. Inventory remains relatively high and prices are typically at their lowest point of the summer months, meaning it could be a good time for families to focus on a home purchase, especially if they are looking to move in line with the academic year. Sellers can be informed that a sale in August could mean locking in a deal before activity slows further and longer listing times become more common.