Home sales in the U.S. cooled down in the final month of summer.

Existing home sales fell 2% to a seasonally adjusted 5.88 million units in August from a month earlier, according to the National Association of Realtors (NAR). July sales were revised slightly upward to 6 million units. The results exceeded analyst expectations of a 1.7% decline, according to Bloomberg consensus estimates. The dip was expected since pending home sales — a leading indicator for actual sales — fell for two straight months, in July and June.

"The housing sector is settling down," said Lawrence Yun, chief economist at the NAR in a press call releasing the results, adding that the surge in activity last year when the COVID-19 lockdowns lifted "was an anomaly."

Year-to-date, home sales are up 16% from the same period a year ago and up 12% from the same period in 2019. This indicates that sales activity is still above pre-pandemic levels. In February 2020, prior to the pandemic lockdowns, there were 5.7 million units sold.

"Home sales are trying to return to normal equilibrium," said Yun.

"Though home sales remain brisk by historic standards, August existing home sales reversed some of the gains made earlier in the summer — a potential sign of buyer fatigue after months of rock-bottom inventory and lightning-fast home price growth," said Matthew Speakman, a Zillow economist, in a press statement after the data release.

Total housing inventory, or homes available for sale at the end of August, totaled 1.29 million units, down 1.5% from July’s supply and down 13.4% from one year ago (1.49 million). At the current sales pace, unsold inventory sits at a 2.6-month supply, unchanged from July but down from 3.0 months in August 2020.

Yun said inventory is still tight but the declines are not as severe, adding that by December or January 2022 he expects inventory "to turn the corner and increase." Homebuilding activity will steadily build up inventory. Single-family homebuilding is up 24% year-to-date, he noted.

"While housing activity has clearly cooled from its frenzy during the midst of the pandemic, home sales remain well above the pre-pandemic pace and the median sales price continues to grow, albeit at a slower pace," said Realtor.com Chief Economist Danielle Hale, in a press statement prior to the results.

The median existing-home price for all housing types in August was $356,700, up 14.9% from August 2020 ($310,400), as prices increased in all four regions of the U.S. While this marks 114 straight months of year-over-year gains, Yun said the pace of growth is slowing down from the +20% increases we were seeing during the surge of activity last year. Tight inventory is continuing to push prices up and putting pressure on housing affordability.