Existing US Home Sales Drop to 3.98M Despite 7-Year Inventory High

Existing home sales fell to a seasonally adjusted annual rate of 3.98 million in August, dropping below the 4 million threshold as elevated borrowing costs suppressed buyer demand even as housing supply reached a nearly seven-year high, according to a National Association of Realtors report.

The 2.0% month-over-month and 1.2% year-over-year decline in sales volume stands in contrast with accumulating properties on the market, illustrating an affordability disconnect where prospective buyers remain sidelined by mortgage rates despite greater selection.

"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," said NAR Chief Economist Lawrence Yun in a statement.

Inventory Reaches Levels Unseen Since 2019

Total housing inventory climbed to 1.62 million units in August, representing a 3.2% increase from July and a 5.9% rise compared to August 2025. This marks the first time total inventory has exceeded 1.6 million units since November 2019, according to historical tracking by the NAR.

"The number of months it would take to exhaust the total inventory at the current sales pace has grown to 4.9 months’ supply, its highest level in over ten years. The ample supply of homes for sale on the market is giving homebuyers better opportunities to negotiate," added NAR Chief Economist Lawrence Yun.

Prices Continue Upward Despite Slowing Demand

Even with sluggish transaction volumes, the median existing home sales price for all housing types rose to $429,100 in August. This represents a 1.6% increase from the $422,400 median recorded in August 2025.

The price growth extends a prolonged streak of appreciation, marking the 38th consecutive month of year-over-year price increases across the United States.

What Is at Stake for Buyers and Sellers

The simultaneous rise in unsold inventory and median prices highlights the friction in the residential housing market. While the expanding 4.9-month supply metric provides purchasers with enhanced negotiating leverage compared to the severe shortages of prior years, stubbornly high mortgage rates continue to restrict overall market liquidity and transactional velocity.