US Existing Home Sales Fall 2.0% to 14-Month Low in August

U.S. existing home sales fell 2.0% in August to a seasonally adjusted annual rate of 3.98 million units, reaching a 14-month low as higher borrowing costs suppressed buyer demand across the housing market.

"It's not surprising to see a mild dip in home buying activity due to high mortgage rates," said Lawrence Yun, the NAR's chief economist, in a statement regarding the housing data.

Mortgage Rates and Inventory Dynamics

The drop in transactions coincides with elevated borrowing costs driven by rising long-term bond yields. According to an AOL report, the popular 30-year fixed mortgage rate averaged 6.66% at the end of July and climbed to 6.71% last week, marking the highest average in more than a year.

Despite the slowdown in completed sales, housing inventory continued to expand. Total existing housing inventory increased 3.2% month-over-month to 1.62 million units, representing the highest supply level recorded since November 2019. On an annual basis, available supply rose 5.9% compared to the same period a year earlier.

Pricing Trends and Historical Context

Even as transaction volumes retreated to their lowest mark since June 2025, home prices maintained upward momentum. The median existing home price for all housing types rose 1.6% from a year ago, reaching $429,100.

This dynamic of rising prices alongside a multi-year high in unsold inventory reflects a persistent affordability gap. Elevated mortgage rates have created a lock-in effect among existing homeowners who secured lower rates during previous years, restricting the pool of available properties while keeping competition fierce enough to support median price gains despite sluggish overall demand.