WASHINGTON, DC — Existing home sales slipped in August as mortgage rates moved back to their highest level in more than a year, adding another obstacle for buyers already struggling with affordability. Sales fell 2% from July to a seasonally adjusted annual pace of 3.98 million homes, according to National Association of Realtors data released Thursday.
That marked the slowest sales rate in more than a year and left activity 1.2% below the level seen in August 2025. The combination of higher borrowing costs and limited inventory continues to weigh on the housing market, even as prices have not given buyers much relief.
Mortgage Rates Stayed in a Tight But Painful Range Through August
Rates spent most of August between 6.6% and 6.7%, a range high enough to push many would-be buyers out of the market. Last week, the average rate reached 6.71%, the highest since mid-2025.
In recent days, rates have continued to climb as global bond markets sold off and oil prices moved higher. Lawrence Yun, chief economist for the National Association of Realtors, said home sales and mortgage rates generally move in opposite directions and noted that rates have been rising since February.
Regional Sales Fell Almost Everywhere Except the West
Sales declined from the prior month in every region except the West, where activity was flat. The Northeast, which is typically one of the country’s more expensive housing markets, saw the steepest monthly drop at 4%.
The broad slowdown shows how sensitive buyers remain to financing costs. Even in markets where demand would normally be supported by strong incomes or limited turnover, higher monthly payments are making purchases harder to close.
Low Supply Has Not Stopped Prices From Rising
Although sales remain weak, supply is still tight enough to keep prices moving upward. The median existing home sold for $429,100 in August, up 1.6% from a year earlier.
That pattern creates a difficult market for buyers: fewer homes are available, and the ones that are listed often come with higher sticker prices. For households trying to enter the market, the challenge is not just the mortgage rate but the total cost of buying.
This Year Is Still Ahead of 2025's Weak Pace
Even with August’s setback, sales in 2026 are still running ahead of last year’s poor performance. Through the end of August, existing home sales are up 1.6% from the same period a year earlier, according to the National Association of Realtors.
That improvement is partly tied to lower mortgage rates earlier in the year, which gave the market a brief boost. But the latest rise in borrowing costs has clouded the immediate outlook, and Yun said the jump in bond yields is not a good sign for near-term sales.
What the August Numbers Say About the Housing Market Right Now
The August data point to a market that is still stuck between weak demand and stubbornly high costs. Buyers are reacting to mortgage rates that remain well above recent norms, while sellers face a market that is not producing the kind of fast turnover seen in stronger years.
At the same time, the fact that sales are still running ahead of 2025 shows that conditions have not collapsed. Instead, the housing market appears to be moving in fits and starts, with brief periods of relief followed by renewed pressure from financing costs and price gains.
More on what homes, rents and new builds are doing near you, on RHS Commoner.
