A “For Sale” sign outside a home in Crockett, California, USA on Thursday, September 3, 2026.
Davis Paul Morris | Bloomberg | Getty Images
Home buyers continue to struggle with rising mortgage interest rates and soaring home prices.
Existing home sales fell 2% from July to 3.98 million units in August on a seasonally adjusted annual basis, according to the National Association of Realtors. Sales activity was at its slowest pace since June 2025, and was felt hardest in the Northeast and Midwest.
Sales decreased by 1.2% compared to the same period last year.
This count is based on closings, so deals were likely signed in June and July, when mortgage rates were higher than in the spring. Interest rates rose sharply in mid-July.
“Mortgage rates and home sales are moving in opposite directions, so it’s not surprising that higher mortgage rates would cause a slight decline in home buying activity,” said Lawrence Yun, chief economist at Realtors. “Still, home prices are rising, with existing home sales actually up 1.6% year-to-date through the first eight months of the year.”
As of the end of August, the total number of housing units supplied was 1.62 million units, an increase of 3.2% from July and 5.9% from the previous year. At the current pace of sales, that’s the equivalent of 4.9 months’ supply, the highest level in more than a decade, according to NAR.
Despite increasing supply, prices continue to rise. The median price of homes sold in August was $429,100, an increase of 1.6% from August 2025. This was the highest price for August.
Price increases were largest in the Northeast, where inventories are lowest. The West was the only region where median prices fell year-over-year.
Sales of the highest-end products on the market continue to be strong. Compared to August 2025, sales of homes priced between $100,000 and $250,000 decreased by 10%, while sales of homes priced over $1 million increased by 3.9%. Sales increased only in the price range above $1 million.
Homes are on the market longer, averaging 31 days in August compared to an average of 29 days in July.
Purchasers who paid entirely in cash accounted for 27% of sales in August, up slightly from July but down slightly from last August. First-time buyers accounted for 30% of sales, up slightly from both July and August 2025.
However, the number of investors and second home buyers was down compared to 2025, accounting for just 15% of sales in August, down from 21% a year earlier.
