Key facts
- Existing US home sales fell 2% in August to a seasonally adjusted annual rate of 3.98 million units.
- This marks the slowest sales pace since June 2025.
- The median sales price for existing homes rose 1.6% year-on-year to $429,100 in August.
- The average rate on a 30-year mortgage hit 6.76% this week, the highest in over 14 months.
- Home inventory increased 3.2% from July to 1.62 million unsold homes.
- The months' supply of homes for sale reached 4.9 months, the highest in over a decade.
Sales of previously occupied US homes declined in August to their slowest annual pace in more than a year, as potential buyers contended with climbing mortgage rates and elevated home prices. The National Association of Realtors reported that existing home sales fell 2% from July to a seasonally adjusted annual rate of 3.98 million units. This marks the third consecutive monthly decrease and falls just short of the 4 million pace economists had anticipated.
Mortgage rates have been on an upward trend since February, driven by expectations of higher inflation amid surging oil prices, which has pushed up long-term bond yields. The average rate for a 30-year mortgage reached 6.76% this week, its highest level in over 14 months. Lawrence Yun, NAR’s chief economist, warned that rates could soon approach 7%, following the trajectory of the 10-year Treasury yield, which stood at 4.92% on Thursday morning.
Despite the slowdown in sales, national home prices continued to rise. The US median sales price increased 1.6% year-on-year to $429,100 in August, an all-time high for the month. Home prices have now increased on an annual basis for 38 consecutive months. The housing market has been in a slump since 2022, exacerbated by a chronic shortage of homes for sale.
Inventory levels saw a slight increase, with 1.62 million unsold homes at the end of August, up 3.2% from July. This translates to a 4.9-month supply at the current sales pace, the highest in over a decade, potentially offering more leverage to buyers who can afford current rates or pay in cash. First-time buyers accounted for 30% of purchases, up from 29% in July.