US existing home sales last month hit the lowest level since June 2025 amid persistent affordability headwinds, the National Association of Realtors said Thursday.
Sales fell 2% sequentially to a seasonally adjusted annual rate of 3.98 million units in August, marking the lowest level in 14 months. The consensus was for a 1.7% decrease in a survey compiled by Bloomberg.
The median sales price of existing homes increased 1.6% year over year to $429,100 last month, representing the 38th straight month of annual gains. The average 30-year fixed mortgage rate rose to 6.67% in August from 6.54% the month prior and 6.59% a year earlier, the NAR said, citing Freddie Mac data.
"The bigger picture remains little changed, with activity subdued by historical standards as elevated borrowing costs and home prices continue to limit purchasing power," TD Economics Economist Admir Kolaj said in a note.
Single-family home sales dropped 1.9% month over month to 3.62 million units in August, while condominium and co-op sales fell 2.7% to 360,000 units, NAR data showed. Region-wise, sales declined in the Northeast, Midwest and South, but remained steady in the West, according to the report.
"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," NAR Chief Economist Lawrence Yun said.
The number of months it would take to exhaust the total inventory at the existing sales rate has increased to 4.9 months' supply, marking its highest level in more than a decade, according to Yun. "The ample supply of homes for sale on the market is giving homebuyers better opportunities to negotiate."
However, near-term financing conditions are tightening, with the daily measure of 30-year fixed mortgage rates approaching 7%, which will likely further erode housing affordability and limit buyer demand, according to TD Economics.
"The labor market continues to provide some support, but households are facing additional pressure from rising costs elsewhere, like higher fuel prices, which are chipping away at disposable income," Kolaj said. "Against this backdrop, existing home sales are likely to remain subdued through the remainder of the year."
On Wednesday, Redfin said new US home listings hit their highest level in more than four years in August, pushing the total inventory of homes for sale to its highest level since 2020.
Earlier in the week, Zillow Group (Z, ZG) said US home sales fell annually last month as high mortgage rates dampened buyer demand and pushed more prospective buyers into a strengthening rental market.
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