August 2025 Home Sales Decline: What Buyers And Sellers Need To Know

By Jeff Hernandez, Realtor & Attorney — The Connie Colla Group at RETSY

The housing market is always in motion; sometimes sprinting ahead, sometimes catching its breath. August 2025 was one of those pause moments. Nationally, existing-home sales dipped just 0.2% to a 4.00 million annual rate of sales, even as the median home price climbed to $422,600, up 2% year over year.

On the surface, those numbers look modest. But when we peel back the layers, the story becomes much more interesting, especially for buyers and sellers in Scottsdale and Phoenix’s luxury markets.

Here Are the Key Takeaways:

• Existing-home sales: 4.00 million Seasonally Adjusted Annual Rate, down 0.2% month over month but up 1.8% year over year
• Median price: $422,600 (+2% year over year)
• Inventory: 1.53M homes, equal to 4.6 months of supply
• Active listings: Up 20.9% year over year, 22nd straight month of growth
• Pending contracts: Up 4% month over month and 3.8% year over year (a positive forward signal)
• Luxury market: Median $1.25M (+3.9% year over year), but sales were -0.7%, the slowest August since 2013

Why the Market Slowed in August:

Several factors combined to keep sales soft in August:

1. Prices Are Still Pushing Buyers to the Sidelines

Home values continue to rise nationwide, and while that’s reassuring for homeowners, it’s making affordability a real challenge. With the median existing-home price at $422,600, many households are stretching to qualify or pausing their search altogether. 

First-time buyers feel this pressure the most, often delaying purchases until conditions improve. Even luxury clients are weighing carefully whether the condition and features of a home truly justify the price tag.

2. Mortgage Rates Remain Elevated

Rates eased slightly in September, with Freddie Mac reporting the 30-year fixed at 6.26% (September 18) and 6.30% (September 25). That’s better than earlier this year, but still far above the ultra-low 3% levels of 2020–2021. 

A single percentage point difference can add hundreds of dollars to a monthly payment, and that reality is shaping buyer psychology. Many households are choosing to wait, hoping for a bigger drop.

3. Inventory is Expanding

The good news for buyers is choice. According to Realtor.com’s August 2025 Market Trends, active listings rose 20.9% year over year, surpassing one million homes for the fourth straight month. 

This marks the 22nd consecutive month of inventory growth. Instead of the frenzied bidding wars of the pandemic era, buyers now have time to compare properties, negotiate more confidently, and walk away if the deal doesn’t feel right.

4. Seasonal and Cyclical Factors

August is traditionally a slower month. Families wrap up summer vacations and shift their attention back to school and work. 

But there’s already evidence of stronger momentum ahead: the NAR Pending Home Sales Index rose 4.0% in August and 3.8% year over year, suggesting contract activity is building and closings may rebound in the fall.

What the Numbers Mean for Buyers

For serious buyers, this environment presents opportunities. More inventory means less pressure to rush decisions. Negotiation power is back on the table, whether in the form of seller concessions, closing cost credits, or more favorable terms.

That said, financing remains critical. Getting pre-approved early gives buyers a competitive edge in a market, especially in desirable Scottsdale and Paradise Valley neighborhoods, where unique attributes, such as panoramic views, gated privacy, or architectural pedigree, continue to attract strong demand.

Another advantage for today’s buyers is time. Instead of competing in 24-hour multiple-offer scenarios, you can thoroughly inspect homes, explore comparable properties, and make choices with confidence.

What the Numbers Mean for Sellers

For homeowners considering a sale, August delivered a clear lesson: pricing and presentation matter more than ever. With buyers having more choices, overpricing leads to extended days on market and price reductions. 

According to NAR, the median time on market was 31 days in August, compared to just a few days during the height of the frenzy.

To stand out, sellers should:

• Price strategically. Align with current comps to attract qualified buyers.
• Stage thoughtfully. Highlight lifestyle appeal; luxury buyers want to envision entertaining, relaxing, and living in the space.
• Stay flexible. Offering repairs or concessions upfront can prevent weeks of stalled negotiations.

The Scottsdale and Phoenix luxury markets remain resilient, but buyers are more deliberate. Properties with unique features, distinctive architectural design, dramatic mountain views, or resort-style amenities continue to command strong offers. Homes without those distinguishing factors may sit on the market longer unless they are priced correctly.

What Investors Should Watch

For investors, August underscored the importance of focus.

• Target scarcity. Land, iconic views, and distinctive architecture will hold value even in a softer market.
• Mind the hold period. In flat conditions, shorter holds reduce exposure to risk.
• Watch contract activity. The Pending Home Sales Index is a leading indicator of demand, helping to forecast where the market is heading.

The luxury rental and second-home markets in Arizona also remain attractive, particularly as out-of-state buyers continue to seek winter escapes and investment opportunities in the desert.

Regional Highlights

The national data masks important regional differences.

• The West was up 1.4% month-over-month, showing resilience in states like Arizona.
• The Midwest also gained 2.1%, while the Northeast fell 4.0% and the South slipped 1.1%.

Locally, Scottsdale and Phoenix continue to see strong interest in luxury segments, though buyers are taking more time to evaluate properties. Instead of bidding wars, deals are often shaped by thoughtful negotiations and measured offers.

Looking Ahead: Late 2025 and Early 2026

The housing market outlook will hinge on mortgage rates and inventory trends. Three scenarios are possible:

1. Rate relief drives a rebound. If rates ease further, more buyers may enter the market, converting pending contracts into closed sales.
2. Sideways pricing with longer marketing times. With supply balanced near 5–6 months, prices could level off while homes take longer to sell.
3. Segment-specific corrections. Luxury homes without standout features may require deeper discounts to move, while rare properties continue to attract premiums.

Conclusion

Navigating today’s housing market takes both expertise and strategy. Whether you’re buying, selling, or investing in Scottsdale or Phoenix, the key is to make informed decisions backed by reliable data and trusted guidance.

At Jeff Hernandez, Esq. Scottsdale Real Estate Agent & Attorney, I provide clients with personalized strategies and a white-glove experience designed to make every transaction smooth and successful. If you’re considering your next move in Arizona’s luxury real estate market, I’d be honored to guide you.

Call me directly at (602) 550-1114 to start a conversation about your goals today.