US existing home sales fell 2% in August to a seasonally adjusted annual rate of 3.98M units, according to National Association of Realtors data. The drop marked the slowest pace since June 2025 and showed how higher mortgage rates are still overpowering more available supply.
Sales declined 1.2% from August 2025, with the Northeast and Midwest taking the hardest hit. August closings likely reflected contracts signed in June and July, when borrowing costs moved higher.
"It's not surprising to see a mild dip in home buying activity due to high mortgage rates."
Lawrence Yun, National Association of Realtors.
The 30-year fixed mortgage rate averaged 6.66% at the end of July and recently reached 6.71%. That was the highest level in more than a year.
Mortgage rates have climbed with long-term US government bond yields, which rose amid inflation concerns, monetary policy uncertainty, and higher government debt.
More supply has not fixed affordability
Housing inventory rose to 1.62M homes at the end of August, the highest level since November 2019. That equaled 4.9 months of supply at the current sales pace, up from 4.6 months in July. The added supply still has not pushed prices lower nationally.
The median existing-home price increased 1.6% from August 2025 to $429.1K, a record high for August. The pressure is uneven across the country.
The West was the only region where median prices fell year over year. The Northeast posted the strongest gains because inventory remained tight.
Buyers with cash and wealth still have an edge
The higher end of the market remained stronger than lower price tiers. Sales of homes priced above $1M rose 3.9% from August 2025, while sales between $100K and $250K fell 10%.
Cash buyers made up 27% of August sales, and first-time buyers accounted for 30% of transactions. Investors and second-home buyers pulled back to 15% of sales, down from 21% in August 2025.
Homes also took longer to sell, averaging 31 days on the market in August. Some buyers are gaining leverage as listings build and demand cools. About three in five US homes sold below their original asking price in August.
West Palm Beach and Austin saw even higher discounting.
"More listings mean buyers can take their time."
Chen Zhao, Redfin.
That leverage does not equal affordability for many households. Mortgage rates spent August between 6.6% and 6.7%, levels high enough to sideline many prospective buyers.
Buyers who can handle today’s payments have more choices and bargaining power. Those who cannot are still waiting for borrowing costs to come down.