Supply is up, sellers are adjusting, and for buyers who can afford it, the terms are shifting
The US housing market ended August with more homes for sale than at any point since 2020, as new listings hit their highest level in four years and buyers gained measurable negotiating room, even as mortgage rates climbed to a fresh 2026 high.
New listings rose 2.6% month over month to 393,178 in August, according to Redfin, the real estate brokerage powered by Rocket.
The surge in fresh supply was led by San Jose, California, where listings jumped 25.5% year over year, followed by Nashville, Tennessee (15.8%) and Seattle, Washington (13.7%).
Total active inventory reached 1,534,918 homes, up 3.9% from July and the highest level since 2020.
Demand stalls as costs remain a barrier
Supply gains have not unlocked buyer activity. Pending home sales barely moved in August, rising just 0.1% from July and sitting near a one-year low, while closed sales fell 0.5% month over month to their lowest level in over a year.
The median US home-sale price rose 2.2% year over year to $398,596 — a record August high — and the monthly average mortgage rate climbed to 6.67%, its highest point in over a year.
"Even though housing is still expensive, the good news for homebuyers is that most other market forces are tilting in their favor," said Chen Zhao, Redfin's head of economics research, in the company's August report.
"More listings mean buyers can take their time, compare homes and negotiate instead of feeling pressured to jump on the first decent property they see. In many parts of the country, buyers may be able to negotiate on price, repairs or closing costs — and walk away if the numbers don't work."
That shift was anticipated. As Mike Fratantoni, chief economist at the Washington, D.C.-based Mortgage Bankers Association (MBA), previously told Mortgage Professional America, "in more and more markets around the country, it's going to be a buyer's market as opposed to a seller's market."
The August inventory figures confirm that trajectory is now visible in the data.
Russ Taylor says tariffs affecting Canadian wood products are expected to raise costs across building supply chains, creating potential challenges for builders at a time of elevated mortgage rates and weaker housing demand.https://t.co/bh76FMOb9s
— Mortgage Professional America Magazine (@MPAMagazineUS) August 28, 2026
Sun Belt discounts contrast with Bay Area heat
Three in five US homes, or 59.5%, sold below their original asking price in August. West Palm Beach, Florida, led the country at 85%, followed by Miami (83%), Austin, Texas (82%), San Antonio (82%) and Dallas (79%).
Years of aggressive homebuilding across Texas, and a concentration of luxury listings in South Florida, have made these among the strongest buyer's markets in the country.
San Francisco is the inverse. Just 30% of homes sold below asking price, the lowest share nationally, while closed sales rose 9.5% year over year, driven by AI-sector wealth concentrated in the city.
Forecasters who projected buyers gaining leverage in 2026 acknowledged this kind of city-level divergence would define the year, and August confirmed it.
Seattle sits at the other end of the spectrum. Active inventory climbed 24.2% year over year, yet closed sales fell 8% and the median price dropped 5.3% to $797,192.
Redfin Premier agent Sheryl Wingate attributed buyer caution to tech-sector job uncertainty making buyers hesitant across the greater Seattle area. That pattern aligns with what the MBA's long-term analysis of weakening US housing demand warns could shape multiple markets well beyond this cycle.
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