National Data

Data Points Towards Slight Cooling in the Market This Fall

By Mike Simonsen on August 14, 2023


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Mike Simonsen

Mike Simonsen is the founder and president of real estate analytics firm Altos Research, which has provided national and local real estate data to financial institutions, real estate professionals, and investors across the country for more than 15 years. An expert trendspotter, Mike uses Altos data to identify market shifts months before they hit the headlines.

It’s mid-August, mortgage rates have been stubbornly above 7% for two months now, and it sure looks like home buyers are growing weary. We can see signs that buyers are slowing, both in the sales volume and in the prices paid. This slowdown is not like last year, instead it’s just slightly fewer buyers each week. As a result, sales volumes are inching down - making slightly worse comparisons to last year.

Every week Altos Research tracks every home for sale in the country. We analyze all the pricing, supply and demand, and all the changes in that data and we make it available to you before you see it in the traditional channels. If you aren’t using Altos market reports with your clients, your buyers and sellers, now might be the time to step up. Go to and book a free consult with our team. Because everyone is worried about what’s happening right now. They need you to help them see clearly. The data we cover here in these national videos is available for every zip code in the US. Join us to dive in.

I’m Mike Simonsen, I’m the founder of Altos Research. Let’s look at the data for the first week of August. Please refer to the video below for all the charts I mention in this transcript!




Available inventory of unsold single-family homes ticked up again by less than one percent again this week to 492,000. This is a seasonal inventory gain. There are 10% fewer homes on the market now than last year at this time. But it looks to me like one of the signals of slightly fewer buyers. In the first half of the year, inventory declined because demand was greater than the season would indicate. Now that extra little boost of demand seems to be gone from the housing market. 

I’ve been saying it looks like available inventory of homes for sale will peak in two weeks at the end of August and start declining for fall. In this chart you can see the dark red line for this year is right on a normal curve for inventory. See how the tan line of 2021 peaked right about on the same curve we’re seeing this year. Normal seasonality balance says that we’re almost at peak inventory. 

Assuming inventory peaks in two weeks also assumes mortgage rates don’t spike from here. And while the inflation data has been steadily improving each month, the economy has stayed stronger for longer than nearly anyone anticipated and as a result rates haven’t gone down. If the economy reports surprising growth again this month and quarter, you could imagine a scenario where mortgage rates go up from here.

When thinking about where housing inventory goes from here, remember this rule of thumb - call it the Altos Rule: higher mortgage rates equals higher inventory. Lower rates lead to lower inventory. Higher mortgage rates create greater holding costs for real estate and therefore fewer people hold real estate, we see more sales, more inventory. Lower mortgage rates spur demand and hoarding of homes so we get less inventory.

There are about 10% fewer homes on the market now than last year at this time. Last year mortgage rates climbed rapidly and inventory climbed rapidly. - that’s the Altos Rule.  When mortgage rates eased down in the beginning of the year and so did available inventory of unsold homes. But now rates are not falling, they’re staying stubbornly higher around 7% and therefore inventory hasn’t yet started its decline for the fall. Look for that decline to start in September with fewer sellers, unless rates jump like they did last September. At Altos we don’t predict mortgage rates, we measure the housing market. So I don’t know what will happen to rates, up down or sideways. But we do have a lot of data for what happens to the housing market in either case. 


Sales Rate


If we look at the transaction rate each week - the total number of new contracts for homes - you can see that in the first half of the year, the pace of sales was steadily returning to closer to normal. The dark red line was approaching last year’s light red line. But then in June mortgage rates jumped to 7% and now there are fewer home sales each week. There were 63,000 new pendings in the single family group this week. That’s 11% fewer than last year at this time. For a few weeks there it looked like our sales rate might finally eclipse the slowdown from last year. But these higher rates are putting just enough of a damper on demand and on supply that the pace of sales seems to have slowed again. See how the dark red line is starting to move lower than last year again.


Price Reductions


You can see the nuance of a slowdown in the price reductions data too. There are now 35.1% of the homes on the market that have taken price cuts. That’s climbing by about 50 basis point per week. It’s not a lot, this leading indicator does not show prices falling. But it’s showing slightly more weakness than earlier in the year. In this chart notice the dark red line improved dramatically earlier in the year. It dropped from cold into the normal range. Last year the market was changing rapidly. See last year’s light red line and how many price cuts were happening each week. 

So this summer slowdown is much more subtle. Consumers are sensitive to higher mortgage rates. Each week slightly fewer offers, so slightly more price reductions. Price cuts don’t typically peak until October so it’s the slope of the dark red line that we’re paying attention to now. And we could finish the year with more price cuts than any recent year except last year. Stronger than last year, but cooler than the surprising first few months of 2023.


Home Prices

Home prices are holding steady each week.The median price of single family homes in the US is just a hair under $450,000 now. That’s basically unchanged for four weeks in a row. And it’s almost exactly the same as a year ago. Home prices are just a tiny sliver higher than they were a year ago. 

The median price of the newly listed cohort ticked down a fraction for $399,000. That’s also a tiny sliver higher than a year ago. That’s the light red line in this chart. See how the light red line has a steady decline in the second half of the year each year. Last year was a steeper than normal decline. So this home price measure should tick down over the next couple months as is normal for the late summer early fall. If you’re listing your house late in the year, you tend to take a slight discount to make sure it moves before the end of the summer or before the holidays. So while I’ve been pointing out slight buyer weakness it will be important to watch the price of the new listings each week to see if that price weakness accelerates like it did last year.

The median price of all the homes that went into contract this week is $371,483. That’s almost 2% lower than last week and a fraction lower than last year for the first time in a few months. 
We have noticed in the last few weeks as mortgage rates have stayed over 7% that the price of the new pendings - the new sales going into contract each week - the price of those seems to be giving up gains over last year. This makes sense with the other data I’ve shared here today.  In this chart notice the dark red line has been trading higher than the light red line for several months. This week you can see that the latest home sales prices dipped below last year. Now, I don’t see this as home prices falling dramatically and because they did fall dramatically in September last year, home prices will likely end the year up a few percent over 2022. But as I’ve been trying to highlight here, consumers are very sensitive to mortgage rates and rates are inching up. The higher those rates go, the more at risk the annual home price appreciation is. 

That’s really something to keep our eyes on in the coming weeks.

This is of course national data, and local markets are behaving very differently from each other right now. If you need to get your local data to your buyers and sellers right now, you should join us at Altos Research. Go to and book time with our team to learn how to interpret the market signals for the people who need it most right now. They need you to be the expert for them.

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And, if you want to learn how to read and interpret all the stats in the report, I encourage you to download our free eBook: "How to Use Market Data to Build Your Real Estate Business."

See you next week!

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