US existing-home sales fell to their slowest annual pace in more than a year in August as higher mortgage rates and record prices kept many buyers on the sidelines.
Sales of previously owned homes dropped 2 per cent from July to a seasonally adjusted annual rate of 3.98 million, according to the National Association of Realtors (NAR). The figure marked a third consecutive monthly decline and was 1.2 per cent lower than in August 2025. ([apnews.com](https://apnews.com/article/f6805f57c7e0f147592357f8e378030d))
The slowdown was most pronounced in the north-east and Midwest. Because the figures are based on completed transactions, many of the purchases reflected contracts agreed in June and July, when borrowing costs were already elevated.
Lawrence Yun, the NAR’s chief economist, said: “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.”
The average rate on a 30-year fixed mortgage reached 6.71 per cent in the week ending September 3, up from 6.66 per cent the previous week, according to Freddie Mac. The rate was 6.50 per cent a year earlier. ([freddiemac.com](https://www.freddiemac.com/pmms?sf230874538=1&utm_source=openai))
There were 1.62 million homes available for sale at the end of August, an increase of 3.2 per cent from July and 5.9 per cent from a year earlier. At the current sales rate, that amounted to 4.9 months of supply — the highest level in more than a decade. ([apnews.com](https://apnews.com/article/f6805f57c7e0f147592357f8e378030d))
Inventory remains below the roughly two million homes that were typically available before the Covid-19 pandemic, although a four- to six-month supply is generally regarded as a more balanced market between buyers and sellers. ([apnews.com](https://apnews.com/article/f6805f57c7e0f147592357f8e378030d))
Prices continued to rise despite the increase in listings. The median price paid for a home in August was $429,100, up 1.6 per cent from the same month last year and the highest August figure in records dating back to 1999. Prices have now risen year-on-year for 38 consecutive months. ([apnews.com](https://apnews.com/article/f6805f57c7e0f147592357f8e378030d))
The north-east recorded the strongest price growth, where the supply of homes remains tight. The West was the only region to register a year-on-year fall in its median price.
Higher-value properties continued to account for a greater share of activity. Sales of homes priced between $100,000 and $250,000 fell 10 per cent from August last year, while transactions above $1 million increased 3.9 per cent — the only price bracket to record growth.
Properties also took longer to sell, remaining on the market for an average of 31 days in August compared with 29 days in July.
Cash buyers accounted for 27 per cent of sales, while first-time purchasers made up 30 per cent. Investors and second-home buyers represented 15 per cent of transactions, down from 21 per cent a year earlier.
Despite the August setback, existing-home sales were still 1.6 per cent higher over the first eight months of 2026 than during the same period last year. The annual pace, however, remains well below the historic norm of about 5.2 million sales. ([apnews.com](https://apnews.com/article/f6805f57c7e0f147592357f8e378030d))
