Sales of previously occupied homes in the U.S. fell in August to their slowest annual pace in more than a year as homebuyers grappled with rising mortgage rates and home prices.
Sales of existing homes fell 2% last month from July to a seasonally adjusted annual rate of 3.98 million units, the National Association of Realtors reported Thursday. This is the third monthly decline in a row.
Sales also fell 1.2% compared with August last year. The latest sales data fell just shy of the 4 million that economists had expected, according to FactSet.
“It’s not surprising that home sales and mortgage rates are moving in the opposite direction, and we’ve seen mortgage rates go up and up and up since February,” said Lawrence Yun, NAR’s chief economist.
Starting in 2023, home sales have mostly hovered around 4 million a year, a far cry from the historical norm, which is closer to 5.2 million. The last time the annual sales pace was below 4 million was June 2025.
Despite the recent decline, U.S. existing home sales rose 1.6% in the first eight months of this year compared with the same period in 2025, NAR reports.
The housing market has been largely stalled by rising borrowing costs as mortgage rates have risen for months since the war between the U.S. and Iran broke out in late February. Expectations of higher inflation amid rising oil prices have pushed up long-term bond yields, which lenders use as a benchmark when pricing mortgages, pushing up mortgage rates.
The average rate on the benchmark 30-year mortgage hit 6.71% last week, the highest level in more than a year.
Yun noted that the rate could soon reach 7%, given that mortgage rates tend to follow the 10-year Treasury yield, which continues to rise. As of Thursday morning, the bond market yield was 4.92%.
Even as sales slowed, home prices continued to rise across the country last month. The average U.S. sales price rose 1.6% in August from a year earlier to $429,100, an all-time high for August based on data going back to 1999, NAR said. Housing prices have risen annually for 38 months in a row.
The U.S. housing market has been in decline since 2022, when mortgage rates began rising from pandemic-era lows. Sales of previously occupied homes in the U.S. were little changed last year, stuck at a 30-year low.
Years of skyrocketing home prices, especially earlier this decade when rock-bottom mortgage rates fueled a buying frenzy, have left many would-be home buyers frozen out of the market. And a chronic shortage of homes for sale nationally, due in part to years of below-average new home construction, has helped prop up home prices even amid years of sales declines.
