According to the National Association of Realtors, U.S. existing home sales declined 2% in August to a seasonally adjusted annual rate of 3.98 million units, driven by rising mortgage rates and record home prices. The drop marks the third monthly decline for a housing market struggling with borrowing costs.
August Sales Drop and Market Pace
Existing home sales fell to their slowest annual pace in more than a year as home shoppers grappled with rising borrowing costs. According to the National Association of Realtors, sales dropped 2% last month from July to a seasonally adjusted annual rate of 3.98 million units. This marks the third straight monthly decline for the market.
Sales also fell 1.2% compared with August of the previous year. FactSet data shows the latest sales tally fell just shy of the 4 million pace economists were widely expecting. Home sales have hovered close to a 4-million annual pace going back to 2023, staying far short of the historic norm closer to 5.2 million units. The last time the annual sales pace came in below 4 million was June 2025.
Based on figures from the National Association of Realtors, total existing home sales through the first eight months of the year remain 1.6% ahead of where they stood during the same period in 2025, despite this recent slowdown.
Mortgage Rates and Economic Pressures
The housing market has been stymied in large part by rising borrowing costs. Market statistics indicate that home loan rates have climbed steadily in the period following the outbreak of the conflict between the U.S. and Iran. Long-term bond yields, which serve as benchmarks for lenders pricing residential mortgages, have risen due to anticipated inflation driven by spiking petroleum costs.
Did you know? The average rate on the benchmark 30-year mortgage hit 6.71% last week, reaching its highest level in more than a year.
Record Home Prices Persist
Even as sales slowed down, home prices continued to rise nationally last month. The U.S. median sales price increased 1.6% in August from a year earlier to reach $429,100, according to the National Association of Realtors.
This figure marks an all-time high for the month of August based on data going back to 1999.
Frequently Asked Questions
What was the U.S. existing home sales rate in August?
According to the National Association of Realtors, existing home sales fell to a seasonally adjusted annual rate of 3.98 million units in August.
How much did home prices increase?
Compared to the previous year, the median price for a home in the U.S. rose by 1.6% during August, reaching $429,100—a record peak for any August since historical record-keeping began in 1999.
What is causing higher mortgage rates?
Expectations of higher inflation amid surging oil prices following the start of the war between the U.S. and Iran have pushed up long-term bond yields, driving mortgage rates higher.
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