Sales of previously owned homes in the United States declined in August to the slowest pace in over a year, as rising mortgage rates and home prices continued to challenge prospective buyers. According to the National Association of Realtors (NAR), existing home sales fell 2% from July, reaching a seasonally adjusted annual rate of 3.98 million units. This marked the third consecutive monthly decline and represented a 1.2% decrease compared with August 2025. The figure also slightly missed the forecasted 4 million unit pace.
Lawrence Yun, chief economist at NAR, highlighted the inverse relationship between mortgage rates and home sales. He noted that mortgage rates have been climbing steadily since February, following geopolitical tensions affecting global markets. The average rate on a 30-year fixed mortgage reached 6.76% recently, its highest point in over 14 months, and analysts suggest it could approach 7% if Treasury yields continue their upward trend. The yield on the 10-year Treasury note, a benchmark connected to mortgage pricing, stood at 4.92% as of September 10.
Despite the slowdown in sales, home prices nationally continued to rise, with the U.S. median sales price hitting $429,100 in August. This represents a 1.6% increase from the same month last year and sets a new record for the month based on data dating back to 1999. Home prices have now increased on an annual basis for 38 consecutive months.
The ongoing housing market slump, which began in 2022 as mortgage rates rose from pandemic-era lows, has been exacerbated by a persistent shortage of available homes. Long-term underbuilding combined with elevated prices has kept many potential buyers out of the market. While the inventory of unsold homes remains below historical norms, it increased to 1.62 million units at the end of August—a 3.2% rise from July and 5.9% above last year’s level. This corresponds to a 4.9-month supply at the current sales pace, the highest in more than a decade and approaching the range considered balanced between buyers and sellers.
Regionally, sales declined in the Northeast, Midwest, and South, while remaining flat in the West. The Northeast experienced the fastest price growth, with median prices up 4.3% from August 2025, due to a particularly tight supply.
Affordability remains a key challenge for buyers, with mortgage rates, home prices, along with property taxes and insurance all elevated compared to previous years. First-time buyers made up 30% of home purchases in August, a slight increase from 29% in July but still below the historical average of around 40%. Meanwhile, sellers face difficulties as well, with many homes staying on the market longer and about 20% of listings experiencing price reductions.
Heather Long, chief economist at Navy Federal Credit Union, observed that current market conditions are causing many Americans to delay purchasing a home. “It’s not a good time to sell your home,” she said, noting that shoppers are hitting a pause amid rising costs and limited affordability.