August closings slipped to their slowest pace in over a year, even as housing supply hit a decade-plus high
Existing home sales retreated to their slowest pace since June 2025, as climbing mortgage rates continued to suppress buyer activity even as housing supply reached its highest level in nearly seven years.
Sales of previously owned homes fell 2.0% month-over-month to a seasonally adjusted annual rate of 3.98 million units in August, declining 1.2% from a year ago, according to the National Association of Realtors (NAR).
It marks the first time in more than a year that the monthly pace dropped below the 4.0 million threshold. Three of four US regions recorded monthly declines, with the Northeast posting the steepest loss at 4.0%.
Lawrence Yun, chief economist at the National Association of Realtors, said the direction tracked predictably with rate movement.
"Mortgage rates and home sales move in opposite directions, so it's not surprising to see a mild dip in home buying activity due to high mortgage rates," Yun said.
"Homebuying demand, despite higher interest rates, is no doubt being supported by rising wages, which grew 3.1% in August, along with 643,000 net new jobs added since the start of the year. Job creation and wage growth typically drive housing demand."
The 30-year fixed-rate mortgage averaged 6.67% in August, up from 6.54% in July and 6.59% a year earlier, according to Freddie Mac, its highest point of the year.
Because August closings reflect contracts executed in June and July, the data captures the impact of rate spikes that July pending home sales data — which landed at their lowest point of 2026 — had already foreshadowed.
Inventory hits decade-plus high
Housing supply reached 1.62 million units at the end of August, up 3.2% from July and 5.9% from a year earlier, the highest level since November 2019.
At the current sales pace, that represents 4.9 months of supply, up from 4.6 months in both July and August 2025, and the highest reading in over a decade.
Yun said the inventory build is shifting negotiating dynamics.
"The ample supply of homes for sale on the market is giving homebuyers better opportunities to negotiate," he said.
The trend runs counter to the scarcity conditions that have been keeping the US housing market subdued through much of 2026, where rate-locked sellers had been reluctant to list.
The 30-year fixed-rate mortgage rose to 6.71% for the week ending September 3, according to Freddie Mac's Primary Mortgage Market Survey (PMMS) — its highest level since July 31, 2025, when it stood at 6.72%.https://t.co/FWWow9eJM7
— Mortgage Professional America Magazine (@MPAMagazineUS) September 7, 2026
Prices hold, but gains narrow to the top tier
The median existing-home price in August reached $429,100, up 1.6% year-over-year and a new August record. That's the 38th consecutive month of annual price appreciation.
The Housing Affordability Index improved to 104.7 from 101.2 a year ago, a modest gain driven by rising incomes.
The sales gains are concentrated at the top. Transactions on homes priced between $100,000 and $250,000 fell 10% year-over-year, while homes priced above $1 million rose 3.9%, the only price tier to post positive annual momentum.
In markets where US housing affordability has shown measurable improvement as inventory accumulates, entry-level client conversations are beginning to shift, but the August data suggests that shift remains uneven nationally.
First-time buyers represented 30% of transactions, up from 28% a year ago. Cash purchases accounted for 27% of sales.
Investor and second-home activity fell to 15%, down sharply from 21% in August 2025. Properties spent a median of 31 days on the market, two more than in July.
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