Sales of existing homes in the United States stalled in August as higher mortgage rates and shrinking supply weighed on the market, according to the National Association of Realtors (NAR).
Transactions came in at an annualised pace of 4 million units, seasonally adjusted, representing a 0.2% decline from the previous month but 1.8% higher than August 2024.
Sales were strongest in the Midwest, while the Northeast recorded the weakest activity.
"Home sales have been sluggish over the past few years due to elevated mortgage rates and limited inventory," said Lawrence Yun, NAR’s chief economist.
"However, mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months."
Because the data is based on closings, the August figures largely reflect contracts signed in June and July, when mortgage rates were about 50 basis points higher than they are today.
Rates began easing sharply in September, which is not yet reflected in the report.
The performance of the market varied sharply across price categories. Homes priced above US$1 million saw sales rise 8% from a year earlier, the strongest segment. At the opposite end, properties below $100,000 posted a drop of more than 10%.
“Record-high housing wealth and a record-high stock market will help current homeowners trade up and benefit the upper end of the market. However, sales of affordable homes are constrained by the lack of inventory,” Yun added.
Affordability was a key driver in the Midwest, where NAR noted median prices were 22% below the national median.
Supply dynamics shifted in August, with available homes down 1.3% from July, the first monthly decline since the start of 2025.
Even so, supply remained 11.7% higher than a year ago. Inventory stood at 4.6 months’ worth of sales, which NAR described as lean by historical standards.
Tighter supply helped keep prices in positive territory. The median price of an existing home sold in August was $422,600, a 2% increase from a year earlier, marking the 26th straight month of annual gains.
Homes are also spending more time on the market, averaging 31 days in August compared with 26 days a year ago.
First-time buyers continued to struggle, accounting for just 28% of purchases, while cash buyers remained dominant, making up 28% of sales compared with 26% in August 2024.
