U.S. Home Sales Fall Below 4 Million Pace as Rates and Prices Rise

Existing-home sales fell below a 4 million annual pace in August as higher prices and mortgage rates continued to limit what many buyers could afford, even as more homes reached the market.

The National Association of REALTORS, a real estate trade association, reported September 10 that existing-home sales declined 2.0% from July and 1.2% from August 2025 to a seasonally adjusted annual rate of 3.98 million. It was the slowest pace in more than a year and the first reading below 4 million since June 2025.

The figures cover existing homes, not all U.S. housing activity. They show a market in which supply is improving, but the combined cost of purchasing and financing a home remains a major constraint.

Prices continued to rise

The median existing-home price reached $429,100 in August, up 1.6% from a year earlier, according to NAR. It was the 38th consecutive month with a year-over-year price increase.

That price trend matters because the cost of financing remains high. The average 30-year fixed mortgage rate was 6.76% for the week ending September 10, based on the Federal Reserve Bank of St. Louis’ FRED series, which is sourced from Freddie Mac.

The rate is a national weekly average, not a quote available to every borrower. Actual offers vary based on credit history, loan type, down payment, points and lender. It is also a market mortgage-rate measure, not the Federal Reserve’s policy rate.

More homes are available

Inventory rose 3.2% from July and 5.9% from a year earlier to 1.62 million homes. NAR said that was the first time since November 2019 that the total exceeded 1.6 million.

The inventory represented 4.9 months of supply, up from 4.6 months in July and 4.6 months in August 2025. NAR defines months of supply as the time it would take to sell the available inventory at the current sales pace.

More supply can give qualified buyers additional choices and, in some markets, more room to negotiate. It does not guarantee lower prices or equal bargaining power for buyers across the country.

For sellers, increased inventory may mean more competition for buyers and longer negotiations, especially in markets where demand is weaker. The national figures do not determine conditions in every city or metro area.

Affordability improved, but remains difficult

NAR’s housing affordability index rose to 104.7 in August from 101.2 a year earlier. The association said affordability improved year over year in all four regions, with the largest reported gain in the West.

That index improvement does not mean buying has become broadly affordable. A median price of $429,100 combined with a 6.76% average 30-year mortgage rate can still produce a high monthly payment, especially for first-time buyers who often have smaller down payments and less accumulated housing equity.

NAR Chief Economist Lawrence Yun said wages and job creation were supporting housing demand. That is NAR’s interpretation of the market, not an independent finding in the existing-home sales data.

The August results therefore point to a partial shift rather than a clear turnaround. More listings are reaching the market, but prices continue to rise and borrowing costs remain elevated. Those pressures can keep potential buyers on the sidelines even when inventory improves.

What to watch next

The next key signals will be whether mortgage rates ease, whether inventory continues to build and whether price growth begins to moderate in subsequent monthly reports.

For buyers, additional supply may create more opportunities to compare homes and negotiate, but financing costs should remain central to any budget calculation. For sellers, slower sales and increased supply may require more flexibility on price, timing or contract terms.

The next existing-home sales release will help show whether August was a temporary setback or part of a broader pattern of subdued purchases despite improving inventory.

Sources

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