Existing-home sales fell to their slowest pace in more than a year in August while housing inventory climbed to multiyear highs, giving buyers more negotiating power even as elevated mortgage rates and record August prices continued to strain affordability.
By yourNEWS Media Newsroom.
The U.S. housing market moved further in buyers’ favor in August as the supply of homes for sale expanded to its highest level in years, but persistently high mortgage rates and rising prices continued to suppress sales and keep many prospective buyers on the sidelines.
Existing-home sales fell 2% from July to a seasonally adjusted annual rate of 3.98 million, according to the National Association of Realtors, dropping below the 4 million mark for the first time since June 2025, when the annualized pace stood at 3.93 million. Sales were also 1.2% lower than a year earlier.
The slowdown came even as considerably more homes became available. NAR reported 1.62 million existing homes on the market in August, an increase of 3.2% from July and 5.9% from a year earlier. Inventory exceeded 1.6 million units for the first time since November 2019 and represented a 4.9-month supply at the current sales pace, up from 4.6 months in both July and August 2025.
“The ample supply of homes for sale on the market is giving homebuyers better opportunities to negotiate,” NAR Chief Economist Lawrence Yun said.
Separate data from Redfin similarly showed a substantial expansion in housing availability. The brokerage counted 1,534,918 homes for sale nationwide in August, up 3.9% from July and 2.7% from a year earlier, bringing its measure of active listings to the highest level since 2020. New listings increased 2.6% for the month and reached their highest level in more than four years.
The NAR and Redfin figures are separate measures of the housing market, but both point toward the same broad shift: more homes are available while buyer demand remains restrained.
Seattle posted the largest annual increase in active listings in Redfin’s data, rising 24.2%. Boston and San Jose, California, each recorded increases exceeding 17%. The expansion gives buyers in many markets choices that were far more limited during the intense competition of recent years.
“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,” Redfin Head of Economics Research Chen Zhao said.
“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 doesn’t make a home within reach for everyone, but for people who can afford to buy now, it’s a much friendlier market than it was a few years ago.”
Greater choice has not translated into lower national prices.
The median price of an existing home increased 1.6% from a year earlier to $429,100, setting a record for the month of August and extending the streak of annual price increases to 38 consecutive months.
Price trends varied considerably by region. The Northeast recorded the strongest year-over-year increase, rising 4.3% to a median of $556,900. Prices climbed 3.3% to $340,400 in the Midwest and edged 0.7% higher to $366,500 in the South.
The West was the only major region where the median price declined from a year earlier, slipping 0.2% to $619,100.
Redfin’s broader housing-market measure placed the August median home-sale price at $398,596, also the highest August level recorded in its data.
Mortgage rates remain one of the principal obstacles preventing the increased inventory from generating stronger sales.
The average rate on a 30-year fixed mortgage reached 6.71% as of Sept. 3, up from 6.66% the previous week and 6.50% a year earlier, according to Freddie Mac.
Rates briefly dropped below 6% in late February but subsequently climbed, and they have remained above 6.5% each week since mid-July. Mortgage rates generally move in the same direction as yields on 10-year U.S. Treasury securities, which have faced upward pressure amid concerns about persistent inflation and growing government debt.
“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.
“Still, home prices are rising, and existing home sales are actually up 1.6 percent year-to-date through the first eight months of the year,” he added.
Demand weakened across much of the country in August. Existing-home sales were essentially unchanged from July in the West but declined in the Northeast, Midwest and South. Compared with August of last year, sales fell in every region except the South, where they were unchanged.
Other housing-market measures show similar hesitation among prospective buyers. Zillow reported that August home sales declined 0.6% from a year earlier and predicted a “soft close” to the housing market this year as households wait for borrowing costs to ease.
High rates are not the only force restraining the market. Economic uncertainty and inflation are also weighing on demand, according to the National Association of Home Builders.
Most builders surveyed by NAHB continued offering sales incentives to support purchases of newly constructed homes. NAHB Chairman Bill Owens said builders were using those incentives as affordability pressures persisted, while Chief Economist Robert Dietz warned that the single-family home construction market was “on track for a second consecutive annual decline in 2026.”
Income and employment growth are providing some support for households that remain in the market.
Average hourly earnings increased 3.1% in August from a year earlier, according to Labor Department data cited in the report, while the economy added a net 643,000 jobs during the first eight months of 2026.
“Job creation and wage growth typically drive housing demand,” Yun said.
Those gains are competing with mortgage rates near 7%, elevated home prices and other household expenses, leaving many prospective buyers unable or unwilling to purchase despite the growing selection of properties.
For those who can afford to enter the market, however, the balance of negotiating power has changed. More listings mean buyers may be able to request price reductions, repairs or assistance with closing expenses rather than competing immediately for limited inventory.
The shift is especially notable after years in which severe housing shortages frequently forced prospective purchasers to make rapid decisions or compete against multiple offers.
Federal policymakers have also taken steps aimed at housing affordability and supply.
The 21st Century ROAD to Housing Act became law in July, with provisions intended to address housing costs through regulatory changes and financial assistance involving homebuyers, builders and state and local governments.
The Department of Housing and Urban Development took another step Sept. 1 by rescinding 2013 guidance involving housing design and construction requirements. HUD said the previous interpretation had resulted in more than $110 million in repair costs for multifamily property owners during the previous five years.
Despite those initiatives and the increased supply of homes, the August figures illustrate the affordability challenge still confronting the market.
Inventory is moving upward, listings are giving purchasers more choices and sellers in some areas have less leverage than they did several years ago. But borrowing costs remain elevated and prices continue to increase nationally.
For now, the combination has produced an unusual market: buyers who can afford current financing costs have more bargaining power, while many others remain unable to take advantage of the growing supply.
With existing-home sales dropping to a 3.98 million annual pace and inventory reaching levels not seen in years, August showed that greater housing availability alone has not been enough to overcome the effects of high mortgage rates and record seasonal home prices.
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