U.S. Existing-Home Sales Fall 2% in August as Months’ Supply Hits Decade High

U.S. existing-home sales fell 2.0% in August from July, slipping to a seasonally adjusted annual rate of 3.98 million as elevated borrowing costs continued to restrain activity. Sales were also 1.2% below their level a year earlier, putting the market back below a four-million annual pace after July’s 4.06 million rate.

The slowdown came with a noticeable increase in the amount of housing available to buyers. Total inventory rose to 1.62 million homes, and months’ supply reached 4.9 at the current sales pace. The National Association of Realtors said that was the highest level in more than ten years. The median existing-home sales price still increased 1.6% from a year earlier to $429,100.

NAR’s August existing-home sales data showed declines from July in the Northeast, Midwest and South, while sales in the West were unchanged. Compared with a year earlier, sales were lower in the Northeast, Midwest and West and flat in the South. Despite the August decline, NAR said existing-home sales were up 1.6% through the first eight months of 2026 compared with the same period of 2025.

More supply is giving buyers greater negotiating room

The 4.9-month supply reading is one of the more important changes in the August report because it shows that available inventory is growing relative to the pace of completed sales. NAR Chief Economist Lawrence Yun said the larger stock of homes for sale is improving buyers’ ability to negotiate, even though affordability remains constrained by mortgage rates and home prices.

Inventory is still far from uniform across the country, and the national figure does not mean every local market has shifted equally toward buyers. Even so, a higher months’ supply measure reduces some of the scarcity that defined the housing market earlier in the decade. It also gives buyers more time to compare properties and can make sellers more receptive to price discussions, repair requests or other concessions when listings remain on the market longer.

NAR’s Realtors Confidence Index showed a median 31 days on market in August. First-time buyers accounted for 30% of sales, up from 28% a year earlier. All-cash purchases represented 27%, while investor purchases accounted for 15% and distressed sales remained at 2%. Those figures suggest buyers are seeing somewhat more choice, but the market is still difficult for households that depend heavily on mortgage financing.

Price data underline that tension. The national median price rose year over year even as sales volume weakened. That means the increase in available supply has not yet translated into a broad national decline in prices. NAR’s August summary also showed that the market remained uneven by price range, with lower-priced homes generally posting weaker sales comparisons than the top end.

Mortgage rates kept demand close to a four-million pace

Borrowing costs remained a central constraint during the period. Freddie Mac’s Primary Mortgage Market Survey showed the average 30-year fixed mortgage rate at 6.69% on August 6, 6.67% on August 13, 6.65% on August 20 and 6.66% on August 27. The rate then moved to 6.71% on September 3.

Those levels leave monthly payments substantially higher than they would be with lower mortgage rates. For would-be buyers, the effect is direct: a higher rate raises the monthly cost of financing the same home price. That helps explain why additional inventory has not produced a stronger national sales pace while borrowing costs remain elevated.

Existing-home sales data measure completed sales rather than newly signed contracts, so changes in financing conditions can appear in the sales figures with a lag. NAR’s methodology is based on data from multiple listing services and converts the underlying sales volume into seasonally adjusted annual rates so month-to-month comparisons are less distorted by normal seasonal patterns.

The August reading extends a period in which national sales have repeatedly hovered around the four-million mark. The 3.98 million annual rate matched the level recorded in March and was below July’s 4.06 million. NAR attributed the latest monthly decline to high mortgage rates, while also pointing to wage growth and employment gains as sources of underlying housing demand.

Lower-priced homes showed the clearest sales pressure

The composition of sales provides another view of the affordability problem. NAR’s supplemental August data, which are based on a non-seasonally adjusted sample, showed sales of homes priced below $100,000 down 7.9% from a year earlier. Sales in the $100,000 to $250,000 range fell 10.0%, and sales between $250,000 and $500,000 declined 2.2%.

Higher price bands were more resilient. Sales between $500,000 and $750,000 slipped 0.7% from a year earlier, the $750,000 to $1 million category was down 0.1%, and sales of homes priced at $1 million or more increased 3.9%. The divergence does not by itself establish why buyers in each bracket behaved differently, but it is consistent with a market in which financing costs weigh most heavily on households with tighter monthly budgets.

The national median price of $429,100 was below July’s reported $434,100, but NAR does not seasonally adjust median sale prices and cautions that seasonal patterns and the mix of homes sold can affect monthly price comparisons. The year-over-year increase of 1.6% therefore provides a cleaner measure of the continuing rise in prices than the one-month change alone.

The next near-term gauge of existing-home demand will be NAR’s August Pending Home Sales Index, scheduled for September 17. Because pending sales track signed contracts before most of them become completed sales, that report can provide an earlier indication of whether the larger inventory and late-summer mortgage rates are beginning to translate into stronger buyer activity.