Existing-home sales fell at a faster rate in the latest report by the National Association of Realtors® (NAR) on Thursday.
For August, existing-home sales decreased by 2% on a month-over-month basis and at a seasonally adjusted annual rate of 3.98 million. This marks the third consecutive month of declining sales, as July reported a decrease of 1.7% and June fell by 2.4%.
Despite the downhill trend, NAR Chief Economist Lawrence Yun stated that he is not surprised by the drop. At a press conference, he states that “home sales and mortgage rates move in opposite directions, and we have seen mortgage rates rising since February.”
In the latest data, Freddie Mac reported the 30-year fixed-rate mortgage reached 6.76%, its highest level since June 2025. On a yearly basis, existing-home sales have also fallen by 1.2%, but the median existing-home sales price has increased to $429,100.
“What is remarkable, in my perspective, is looking not at single-month data, but the overall trend,” Yun said. “We know that the mortgage rates have been rising since the end of February. Yet, year-to-date sales, for the first eight months of the year versus comparable period one year ago. Home sales prices are actually up 1.6%. Even with rising mortgage rates.”
Yun isn’t the only one unsurprised by the lackluster monthly data. Ali Wolf—chief economist at builder-focused data company Zonda—said in a statement that “the decline in existing home sales isn’t all that surprising, given pending home sales in July were the weakest all year.”
For his part, Yun described homebuyers as “resilient” and states that they are “not falling apart from the rising mortgage rate condition.” Yun attributes this to the job market, which rebounded in August with an increase of 162,000 jobs.
Realtor.com® Chief Economist Danielle Hale expressed concerns on the “new 2026-low” for existing-home sales, and alluded to the upcoming Federal Reserve meeting which economists eagerly anticipate will come with a rate hike.
“With a rate hike in play at next week’s Fed meeting, higher mortgage rates are likely in the near-term, which will keep homebuying costs high, but the expectation of higher financing costs on the horizon could encourage buyers to move ahead rather than wait, creating mixed pressures for buyers this fall,” she said in a statement.
Although sales have fallen, total housing inventory increased from July to August by 3.2%, and is up 5.9% from the same period last year. Now inventory sits at 1.62 million, or a 4.9-month supply of unsold inventory. Hale notes that housing inventory is nearing its highest pace of a 5.1-month supply in November 2015.
“In other words, homebuyers saw the best market-balance conditions on average nationwide in more than a decade,” she said.
Regional affordability
While inventory is seeing some gains nationally, there are regional disparities. Yun stated that “the inventory shortage persists in the New England area,” during his press conference. Most regions also saw little growth in existing-home sales.
The Northeast experienced the greatest drop in sales by 4% month-over-month, and is down 2% on a yearly basis. But the median price did increase by 4.3% from last year, bringing it to $556,900. The Midwest followed closely by decreasing 3.1% on a monthly basis, and is down 2.1% from last year.
The South fell slightly in sales at 1.6%, but this remains unchanged from August 2025. The West remains the unchanging outlier in the report, continuing its static behavior on a monthly basis at an annual rate of 720,000 existing-home sales.
Yet affordability continues to remain on economists’ minds, as NAR reported that the Housing Affordability Index sits at 104.7, which is up from last year’s index of 101.2. Affordability across all regions improved, with the West and South having the greatest increase by 5.9% and 4.5%, respectively.
Ahead of the Fed’s upcoming meeting, many Fed governors made it clear that a rate hike would be on the table should the latest data reflect price pressures. Fed Governor Christopher Waller noted that he’d base his decisions on the latest jobs report by the Bureau of Labor Statistics, while Fed Governor Michael S. Barr stated that there is a “risk for broader price pressures taking hold,” in reference to tariffs and conflicts in the Middle East.
Wolf states that August’s report is the best indicator for how September will pan out, ahead of the Fed’s decisions next week.
“All eyes are on the upcoming Fed meeting, as a rate cut might have buyers pressing play on home shopping,” she said. “But, a rate hike could further erode consumer confidence and keep them on pause.”
For the full report, click here.
