Existing home sales fell 2% month over month in August to a seasonally adjusted annual sales pace of 3.98 million, according to data released Thursday by the National Association of Realtors (NAR). The last time sales activity fell below an annual rate of 4 million was in June 2025.
On a year-over-year basis, existing home sales were down 1.2%, although NAR said existing home sales are up 1.6% through the first eight months of the year compared to the same time frame in 2025.
Regionally, existing home sales fell month over month in the Northeast (-4% to 480,000 units), the Midwest (-3.1% to 940,000 units) and the South (-1.6% to 1.84 million units), but remained unchanged in the West at an annual rate of 720,000 units. On a yearly basis, existing home sales slowed in the West (-2.7%), the Midwest (-2.1%) and the Northeast (-2%), but remained unchanged in the South.
“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,” Lawrence Yun, NAR’s chief economist, said in a statement. “Homebuying demand, despite higher interest rates, is no doubt being supported by rising wages, which grew 3.1% in August, along with 643,000 net new jobs added since the start of the year. Job creation and wage growth typically drive housing demand.”
Pending sales down, price cuts up
HousingWire Data shows a modest uptick in existing single-family home sales for the week ending Sept. 4. Sales rose 1.8% week over week to 73,665 homes.
But the data shows that it still may not be smooth sailing for the market, as pending home sales were down 2.8% compared to a week ago. In addition, 42.1% of properties experience a price reduction, above the normal range of 30% to 35% — a signal that the market may be softening.
NAR data shows that at the end of August, there were 1.62 million units of inventory, up 3.2% month over month and 5.9% compared to a year ago. This marks the first time since November 2019 that inventory exceeded 1.6 million units. That figure represents 4.9 months of supply at the current sales pace, up from 4.6 months in July and a year prior.
“The number of months it would take to exhaust the total inventory at the current sales pace has grown to 4.9 months’ supply — its highest level in over ten years. The ample supply of homes for sale on the market is giving homebuyers better opportunities to negotiate,” Yun added.
“There are now nearly five months of supply on the market, the highest level in over a decade, and sellers who have been sitting are more willing to discuss what it will take to get a deal done,” Coldwell Banker CEO Kamini Lane said in a statement.
“Fall usually brings less competition on top of that. For buyers who have been waiting on the sidelines, that combination could make this a good time to take another look at what’s available.”
Optimism heading into the fall
The median sales price for existing homes came in at $429,100 in August, a 1.6% increase compared to a year ago, marking the 38th consecutive month of year-over-year price increases.
NAR also released its Housing Affordability Index for the month, which came in at a reading of 104.7, up from 101.2 a year ago. Affordability improved in all four regions of the country.
Additionally, the Realtors Confidence Index for August showed the median time on market had risen to 31 days, up from 29 days a month ago, but unchanged compared to a year prior.
The share of first-time buyers was also up, coming in at 30% in August, compared to 29% in July and 28% in August 2025. All-cash sales (27%) were also up during the month, compared to 26% in July, but down from 28% a year ago.
Looking ahead to the fall, industry leaders said they see reasons to be optimistic.
“As homes carry over from summer, I anticipate more willingness to work on price and concessions to help get a sale across the finish line and that gives me a reason to be optimistic about fall,” Mike Miedler, the president and CEO of CENTURY 21, said in a statement. “We can make progress on what it takes for a family to buy a home even while the broader recovery in sales takes more time.”
Despite this, Miedler said he is being “realistic” about how much help the Federal Reserve’s next interest rate decision will provide to the market. As of Thursday, nearly 70% of interest rate traders said there will rate hike next week, according to the CME Group‘s FedWatch tool.