WASHINGTON, September 11 — The story of the American housing market this autumn is one of a market stuck between what buyers can afford and what sellers are willing to accept, and the latest numbers from the National Association of Realtors show that gap widening. Existing U.S. home sales weakened in August to their slowest annual pace in more than a year, NAR reported on Thursday.
Sales of previously occupied homes fell 2% from July to a seasonally adjusted annual rate of 3.98 million units — the third straight monthly decline. Compared with August of last year, sales slipped 1.2%.
The pace came in just shy of the roughly 4 million annual rate economists had expected, according to FactSet.
Rates march higher
“It’s not a surprise home sales and mortgage rates move in the opposite direction and we have seen mortgage rates rising, rising, rising from February,” said Lawrence Yun, NAR’s chief economist. At the heart of the slowdown is the cost of borrowing. Mortgage rates have climbed in the months since the war between the U.S. and Iran started in late February.
Expectations of higher inflation amid surging oil prices have pushed up the long-term bond yields that lenders use as a guide to pricing home loans, driving mortgage rates higher. The average rate on the benchmark 30-year mortgage hit 6.76% this week, its highest level in more than 14 months.
It had briefly dipped below 6% before the war started. Yun noted the rate could soon reach 7%, given that mortgage rates tend to follow moves in the 10-year Treasury yield, which is at levels not seen since late 2023. The yield stood at 4.92% on the bond market as of Thursday morning.
Prices keep climbing
Even as sales slowed, home prices continued to rise nationally last month. The U.S. median sales price increased 1.6% in August from a year earlier to $429,100 — an all-time high for the month of August based on data going back to 1999, NAR said. Prices have risen on continued demand against a limited supply of homes for sale.
The combination of higher rates and record-high prices has reshaped the calculus for would-be buyers: monthly payments on a typical home have grown even as the number of transactions shrinks. For sellers, the slower pace means homes are taking longer to move, while owners who locked in lower rates in earlier years have little incentive to list, keeping inventory tight and supporting prices.
Home sales have mostly hovered near a 4-million annual pace going back to 2023, well short of the historic norm of closer to 5.2 million. The last time the annual sales pace fell below 4 million was in June 2025. Despite the August pullback, existing U.S. home sales were running 1.6% higher through the first eight months of this year than in the same stretch of 2025, NAR said.
The August data underscore how sensitive the housing market remains to financing costs. With the 30-year rate at 6.76% and the 10-year Treasury yield at 4.92%, affordability pressures persist heading into the fall, and Yun’s warning that rates could soon reach 7% suggests the sales slump may not ease quickly.
