U.S. Housing Market Stalls in August Amid High Prices/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. existing home sales fell slightly in August, despite a drop in mortgage rates to a 10-month low. High prices and limited affordability continued to dampen buyer demand, even as inventory rose. Home prices climbed for the 26th straight month, reaching a record August high of $422,600.
August Housing Market Quick Looks
- Sales Dip: Existing home sales fell 0.2% from July.
- Annual Gain: Sales rose 1.8% year-over-year.
- Sales Pace: August saw 4 million units sold (seasonally adjusted).
- Economist Forecasts: Slightly exceeded expectations of 3.96 million.
- Home Prices: Median home price hit $422,600 — record for August.
- Mortgage Rates: Fell to 10-month low late in the summer.
- Inventory Trend: 1.53 million homes for sale, up 11.7% YoY.
- Market Time: Homes stayed on the market for 31 days on average.
- Buyer-Seller Balance: 4.6-month supply, still below pre-pandemic norms.
- Outlook: Lower rates and higher inventory may lift fall sales.
Deep Look: Home Sales Remain Sluggish in August Despite Falling Mortgage Rates
WASHINGTON — Sales of previously owned U.S. homes inched down in August, signaling that even a late-summer slide in mortgage rates wasn’t enough to reignite buyer demand in a housing market still grappling with affordability challenges.
According to the National Association of Realtors (NAR), existing home sales declined 0.2% from July, reaching a seasonally adjusted annual rate of 4 million units — the slowest pace since June. Despite the monthly decline, sales were 1.8% higher compared to August 2024, and came in slightly above economists’ expectations of 3.96 million, per data from FactSet.
Prices Reach New August Record
The median sales price for an existing home rose to $422,600, up 2% year-over-year, marking the 26th consecutive month of annual price increases. It also stands as the highest August median price since the NAR began tracking the data in 1999.
Despite the drop in mortgage rates — which reached a 10-month low late in the summer — home prices remain elevated after several years of rapid gains, continuing to limit affordability for many Americans.
“Mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months,” said Lawrence Yun, chief economist at the NAR.
The Mortgage Factor
Mortgage rates began easing in late July, ahead of the Federal Reserve’s decision last week to cut its benchmark interest rate for the first time in a year. The Fed’s move came amid growing concerns about slowing job growth and economic uncertainty.
While falling rates typically offer relief to buyers by increasing purchasing power, today’s rates are still well above the ultra-low levels seen in 2020 and 2021. For many potential buyers, especially first-time homeowners, the combination of higher home prices and borrowing costs remains a barrier to entering the market.
Inventory Shows Signs of Recovery
One positive development for buyers is a growing inventory of homes for sale. The total number of unsold homes on the market at the end of August stood at 1.53 million, a 1.3% decline from July but a significant 11.7% increase from August 2024.
Still, housing supply remains well below pre-pandemic levels, when 2 million homes for sale was considered typical. The current inventory represents a 4.6-month supply at the current sales pace — unchanged from July, but up from 4.2 months a year ago. A 5- to 6-month supply is typically seen as a balanced market between buyers and sellers.
Homes Taking Longer to Sell
Another sign of a cooling market: homes are staying on the market longer. Properties sold in August were listed for an average of 31 days before going under contract — up from 26 days a year earlier.
This indicates that while some buyers are still active, they are taking more time to make purchasing decisions, possibly due to affordability concerns or increased competition from new listings.
Sluggish Year-to-Date Sales
So far in 2025, sales of previously owned homes are down 1.2% compared to the first eight months of 2024. Last year marked the weakest year for existing home sales in nearly three decades, as the housing market was battered by rising interest rates and shrinking affordability.
This year’s performance continues to reflect those struggles, despite recent signs of stabilization. Many housing analysts remain cautious about the outlook for the remainder of 2025, though some expect that the recent mortgage rate cuts — combined with growing inventory — may help improve sales through the fall.
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