WASHINGTON, DC — Higher mortgage rates finally slowed the housing market in August, ending an eight-month run of growth in pending home sales. Realtor.com’s monthly housing trends data showed that the share of listings in pending status fell 0.2% from a year earlier, the first negative reading since November 2025.
The pullback matters because pending sales are one of the clearest early signs of where completed home sales may be headed next. A listing enters pending status after a seller accepts an offer, but before the closing is finished, so changes in that figure often signal whether buyers are still willing to move forward.
Even with sellers cutting prices more often, demand weakened as borrowing costs stayed elevated through much of the month. Economists cited both affordability pressure and the usual late-summer slowdown as reasons August looked softer than earlier in the year.
Mortgage rates stayed high long enough to dent demand
Freddie Mac said the average rate on a 30-year fixed mortgage reached 6.69% on Aug. 6, the highest level of 2026. Rates stayed close to that range for the next three weeks and ended August at 6.66%, more than 20 basis points above where they were in early July.
Realtor.com senior economist Jake Krimmel said August appears to be the month when higher rates finally caught up with buyers. He noted that mortgage rates moved above their year-ago levels in early August, which made the yearly comparison less favorable for housing demand.
Benjamin Cohen of Rate said buyers are still dealing with a difficult combination of monthly mortgage payments, home prices, taxes and insurance. In his view, many households can accept rates that are not near pandemic lows, but repeated moves higher this summer caused some to pause.
The Midwest and West saw the biggest drop in pending sales
Regional results were uneven. The Midwest posted the sharpest decline, with pending sales down 4.3% from a year earlier. The West followed with a 3.3% drop, showing that higher rates were not just a coastal problem or a challenge limited to high-price metros.
Krimmel said the Midwest is showing clear signs of slowing, even though it has often been viewed as one of the more affordable parts of the country. He said higher interest rates in late summer appear to be wearing down demand there as well.
The South and Northeast moved in the other direction, with pending sales up 1.8% and 1.1%, respectively. That split suggests the market is still functioning, but local conditions and price points are shaping how much pressure each region feels.
Price cuts returned to last year’s level after a quiet spring
Price reductions also gave a clearer picture of a market losing some momentum. In August, 20.4% of active listings saw a price cut, bringing that share back to where it stood a year earlier after trailing last spring.
Discounting was most common in the West and South, where inventory is generally richer and sellers may have more competition. In those regions, 22% of listings in the West and 21.4% in the South were marked down.
By contrast, the Northeast and Midwest had fewer price cuts, at 14.15% and 19.6% of listings, respectively. Krimmel said both softer pending sales and more frequent discounts point to weaker buyer demand when mortgage rates remain high at the wrong time of year.
Seasonal cooling and hot weather also weighed on activity
Krimmel said August data should be read with some caution because late summer usually brings a slowdown in housing activity. Buyers often taper off after the spring and early summer rush, and the month is rarely the busiest stretch for listings or contracts.
He also pointed to weather conditions, saying the U.S. had just endured two of the hottest months on record, which is not ideal for house hunting or open-house traffic. Those seasonal factors likely layered on top of the more obvious pressure from mortgage rates.
Still, Krimmel said the broad message is that housing activity is slowing for now. Nadia Evangelou of the National Association of Realtors agreed that elevated rates have chilled summer demand and said even a modest decline can improve affordability and help ease the lock-in effect for homeowners.
Sellers stayed put as listings rose and median asking prices kept easing
There was at least one sign that sellers have not given up on the market. Delistings fell nearly 13% from last year’s “Cruel Summer,” suggesting fewer owners were pulling homes off the market out of frustration.
The national median asking price fell for the 10th straight month, landing at $424,500, down 1.3% from a year earlier. That is still a decline, but it was less severe than July’s 2.4% drop, which points to a slower pace of price softening.
Active listings rose 3.6% year over year, and all four regions posted inventory gains for the first time in months. New listings, however, were slightly lower nationally and in most regions, with the West the only region to post a gain, at 1.5%.
What would have to happen for the fall market to rebound
Looking ahead, Krimmel said the key questions are whether more sellers start withdrawing homes and where that happens first. He also said price reductions and seller strategy will be important signs to watch as the market moves into fall.
He noted that sellers have been cutting less often and less deeply this year, with repeat discounts nearly cut in half from last July. But if buyers remain hesitant while rates hover near 6.7% and the market moves into its slower season, some sellers may be pushed toward sharper cuts or delistings.
Krimmel said a meaningful drop in mortgage rates would be needed to restart pending sales in a way similar to last year’s fall. Evangelou added that even a 1 percentage-point decline in rates could make the median-priced home affordable to about 5.5 million more households, while Cohen argued that stability in rates may matter almost as much as lower borrowing costs.
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