US existing home sales hit year low in August

Suburban house with for-sale sign as US existing home sales hit a yearly low on rising mortgage rates

Key Points

01Existing-home sales fell 2% in August to a 3.98 million annual rate
02August marked the third straight monthly decline in sales
0330-year mortgage rates climbed to 6.71%, the highest in over a year
04Inventory rose to a 4.9-month supply as the median price set an August record

Existing-home sales slow to weakest pace in over a year

Existing-home sales in the United States fell 2% in August from July to a seasonally adjusted annual rate of 3.98 million units. This was the third straight monthly decline and the slowest annual sales pace in more than a year, highlighting a broad cooling in transaction volumes.

The drop in August adds to a string of monthly setbacks, suggesting that buyer demand has been under consistent pressure. The weakening pace comes despite sales over the first eight months of 2026 running 1.6% higher than in the same period of 2025, indicating that the recent slowdown has emerged after a relatively stronger start to the year.

Rising mortgage costs weigh on demand

Borrowing costs have moved higher, adding to affordability challenges for buyers. The average rate on the benchmark 30-year mortgage reached 6.71% last week, the highest level in more than a year.

Many homes that closed in August likely went under contract in June and July, when 30-year mortgage rates averaged between about 6.43% and 6.66%. Even so, current rate levels point to a more expensive financing environment that may continue to restrain demand in the near term.

Inventory builds as supply reaches decade high

Housing supply has increased alongside the slowdown in sales. There were 1.62 million unsold homes on the market at the end of August, up 3.2% from July and 5.9% from a year earlier.

At the current sales pace, this inventory represents a 4.9-month supply, the highest level in more than 10 years. The rise in months’ supply suggests a market that is gradually becoming less constrained on the inventory side, even as overall activity softens.

Prices continue to rise despite weaker sales

Despite slower sales and higher inventory, home prices are still moving higher. The U.S. median existing-home sales price rose 1.6% year-over-year in August to $429,100.

This was an all-time high for the month of August based on data back to 1999 and extended the streak of annual price increases to 38 consecutive months. The combination of elevated prices and higher mortgage rates underscores the affordability challenges many buyers face even as more homes come onto the market.

Key Takeaways

01Sales volumes are weakening even as year-to-date activity remains slightly above the prior year, showing the slowdown is concentrated in recent months.
02Higher mortgage rates are a central pressure point, tightening affordability and contributing to three consecutive monthly declines in existing-home sales.
03Rising inventory and the highest months’ supply in over a decade contrast with continued price gains, signaling a market where conditions are easing but not yet translating into lower prices.

References