U.S. existing home sales declined in August, dipping to a 14-month low as higher borrowing costs continued to restrain buyer activity. The National Association of Realtors reported that sales fell 2.0% from July to a seasonally adjusted annual rate of 3.98 million units - the lowest level recorded since June 2025.
Economists surveyed by Reuters had expected resales to ease to the same 3.98 million-unit rate. Existing home sales are tallied at the closing of a contract, and the sales recorded last month likely reflect purchase agreements signed in June and July.
Mortgage rates maintained their upward trajectory over the two-month window. Freddie Mac data showed the 30-year fixed-rate mortgage averaged 6.66% at the end of July and rose to an average of 6.71% last week - the highest in more than a year. Those mortgage rates have been moving in step with gains in long-term U.S. government bond yields.
According to the report, yields have climbed amid concerns over inflation tied to the war with Iran, ongoing uncertainty around monetary policy, and an expanding government debt burden. The average 30-year mortgage rate has increased by more than 70 basis points since the U.S. and Israel attacked Iran in late February, the data show.
Lawrence Yun, the NAR’s chief economist, captured the effect of higher rates on buyer behavior: "It’s not surprising to see a mild dip in home buying activity due to high mortgage rates," he said.
Regionally, sales fell in the Northeast, Midwest and South, while transactions in the West were essentially unchanged. On a year-over-year basis, overall existing home sales were down 1.2% in August.
Inventory levels rose alongside the slowdown in demand. Existing housing inventory increased 3.2% to 1.62 million units, the largest supply count since November 2019, and up 5.9% from a year earlier. At August’s sales pace, the current inventory would be exhausted in 4.9 months - up from 4.6 months in July and compared with the same measure a year ago.
Despite the pullback in transactions, prices continued to show modest year-over-year gains. The median existing-home price rose 1.6% from a year earlier to $429,100 in August.
First-time buyers made up 30% of sales in August, a slight increase from 29% in July and 28% a year ago. The report noted that a 40% share from first-time purchasers is commonly viewed as a threshold for a robust housing market.
The median time a property remained on the market lengthened to 31 days in August from 29 days in July, though that figure was unchanged from the same month a year earlier. Distressed sales - including foreclosures - held steady at 2% of transactions.
The August figures illustrate the ongoing interplay between financing conditions and housing market activity: higher mortgage rates have put pressure on buyer demand even as supply has edged higher, producing longer market times and modest year-on-year price growth.