Existing-home sales fell 2.0% in August 2026 to a seasonally adjusted annual rate of 3.98 million, down 1.2% from a year earlier, according to data released September 10 by the National Association of REALTORS®. The last time sales activity fell below an annual rate of 4 million was in June 2025, marking the third straight monthly decline.
While sales slowed, inventory surged. Total housing inventory stood at 1.62 million units at the end of August, up 3.2% from July and 5.9% from a year earlier. NAR said it was the first time since November 2019 that inventory topped 1.6 million units. At the current sales pace, that stock equals 4.9 months of supply—the highest level in over ten years.
“Mortgage rates and home sales move in opposite directions, so it’s not surprising to see a mild dip in home buying activity due to high mortgage rates,” said NAR Chief Economist Lawrence Yun. The shift in market dynamics is giving buyers more room to negotiate after years of bidding wars and limited options.
The numbers
Sales drop while inventory climbs
August marked a turning point: fewer buyers closed deals, but more homes hit the market.
Month-over-month sales held steady in the West and declined in the Northeast, Midwest and South. The Northeast fell 4.0% to an annual rate of 480,000, down 2.0% from August 2025. The Midwest dropped 3.1% to 940,000, down 2.1% from a year ago. The South, the largest region by volume, declined 1.6% to 1.84 million but was unchanged from August 2025.
The average 30-year fixed mortgage rate ran 6.67% in August, according to Freddie Mac figures cited in the report, up from 6.54% in July and 6.59% a year earlier. By mid-September 2026, Freddie Mac’s weekly average had risen to 6.76% for a 30-year fixed-rate mortgage. Pending home sales slid to a 2026 low in July as rates pushed toward their highest levels of the year, a signal that fed through to August closings.
Despite the slowdown, existing home sales are actually up 1.6% year-to-date through the first eight months of the year compared to the same period in 2025. Homebuying demand, despite higher interest rates, is being supported by rising wages, which grew 3.1% in August, along with 643,000 net new jobs added since the start of the year.
August 2026 by the numbers
3.98 million: Seasonally adjusted annual sales rate (down 2.0% from July)
1.62 million: Total homes for sale (up 3.2% from July, up 5.9% year-over-year)
4.9 months: Supply at current sales pace (highest in more than 10 years)
$429,100: Median existing-home price (up 1.6% year-over-year)
6.67%: Average 30-year mortgage rate in August (Freddie Mac)
31 days: Median time on market (up from 29 days in July)
Prices and leverage
Buyers gain negotiating power as supply builds
More homes for sale means less pressure to bid over asking—but prices haven’t dropped yet.
The median existing-home price for all housing types was $429,100 in August, up 1.6% from $422,400 a year earlier. That marked the 38th consecutive month of year-over-year price increases, according to NAR. That is a new record high for the month of August.
Regional price trends varied. The Northeast’s median price was $556,900, up 4.3% year over year. The Midwest’s median price of $340,400 rose 3.3%. The South’s median price of $366,500 was up just 0.7% year over year, the weakest price gain of any region. The West was the only region to see median price decline year over year.
“The ample supply of homes for sale on the market is giving homebuyers better opportunities to negotiate,” Yun said. The median time on market had risen to 31 days, up from 29 days a month ago, but unchanged compared to a year prior. In addition, 42.1% of properties experienced a price reduction, above the normal range of 30% to 35%—a signal that the market may be softening.
The share of first-time buyers was up, coming in at 30% in August, compared to 29% in July and 28% in August 2025. All-cash sales (27%) were also up during the month, compared to 26% in July, but down from 28% a year ago. The full August report is available on NAR’s official statistics page.
What it means
How to use this market shift to your advantage
More inventory and longer listing times create openings for strategic buyers.
The rise in inventory to a 4.9-month supply puts the market closer to balanced conditions. Economists generally consider 4.5 to 6 months of supply a balanced market, where neither buyers nor sellers have overwhelming leverage. After years of severe shortages, this shift is significant.
If you’re shopping for a home now, you have more negotiating power than buyers have had in years. With homes sitting on the market longer and more sellers cutting prices, you can take your time, compare multiple properties, and make offers below asking price—especially if a home has been listed for several weeks. Inspection contingencies and requests for repairs are also more likely to be accepted in this environment.
Mortgage rates remain a headwind. At 6.67% in August and climbing toward 6.8% by mid-September, financing costs are significantly higher than the sub-3% rates of 2020–2021. On a $400,000 mortgage, the difference between a 3% rate and a 6.7% rate is roughly $1,100 per month. That’s why many potential buyers are still sitting on the sidelines, which in turn is keeping sales below historical norms.
If you’re a first-time buyer or have limited savings, explore down payment assistance programs and zero-down loan options that can reduce your upfront costs. If your credit score is below 700, work on improving it before you apply; even a small rate improvement can save thousands over the life of your loan. Our mortgage financing guide walks through how to qualify for the best rates available to you.
For sellers, the August data is a warning: the seller’s market that dominated 2021–2023 is over. Pricing your home realistically from day one is critical. Overpriced listings now sit for weeks and often sell for less than they would have if priced correctly initially. Homes that are move-in ready and priced at or slightly below recent comparable sales are still moving, but fixer-uppers and premium-priced properties are struggling.
Action steps for buyers
Take your time. With 4.9 months of supply, you don’t need to rush. Visit multiple homes, compare neighborhoods, and don’t feel pressured to bid over asking.
Negotiate. Make offers below list price, especially on homes that have been on the market for 30+ days. Request repairs and include contingencies.
Lock your rate. Mortgage rates are volatile. Once you have an accepted offer, lock your rate quickly to avoid increases during your closing period.
Explore assistance. First-time buyers can access grants, low-interest loans, and tax credits that reduce upfront costs. Check your state and local programs.
Quick answers
Existing home sales: common questions
Why did home sales fall in August 2026?
Sales fell primarily because mortgage rates rose through the summer. The average 30-year rate climbed from 6.54% in July to 6.67% in August, and pending contracts signed in June and July—when rates were even higher—closed in August. Higher borrowing costs reduce affordability and push some buyers out of the market.
Is 4.9 months of supply good for buyers?
Yes. A 4.9-month supply is the highest in more than a decade and approaches balanced market conditions (4.5–6 months is considered balanced). This gives buyers more options, less competition, and more leverage to negotiate on price, repairs, and terms. It’s a significant shift from the sub-3-month supplies that were common in 2021–2023.
Are home prices finally coming down?
Not yet. The median existing-home price in August was $429,100, up 1.6% from a year earlier, marking 38 consecutive months of year-over-year increases. However, more sellers are cutting prices (42.1% of listings had reductions in August), and homes are sitting longer. Price growth is slowing, but outright declines are limited to a few regional markets, primarily in the West.
Should I wait for mortgage rates to drop before buying?
That depends on your situation. Rates are unlikely to fall dramatically in the near term; most forecasts expect them to stay between 6.5% and 7% through the end of 2026. If you wait, you may face more competition when rates do drop, which could push prices higher and erase your savings. If you can afford the payment now and plan to stay in the home for at least five years, buying now and refinancing later if rates fall is often a sound strategy.
What regions have the most inventory?
The August NAR report shows inventory rising nationwide, but the South and West have seen the largest increases. The South remains the largest market by volume, with 1.84 million units sold annually, and has relatively modest year-over-year price growth (0.7%). The Northeast has the tightest inventory and the strongest price gains (4.3% year-over-year).
How does this compare to historical sales levels?
Existing home sales have hovered near a 4 million annual pace since 2023, well below the historical norm of around 5.2 million. The August rate of 3.98 million is one of the slowest paces in recent years. Sales are constrained by high mortgage rates, elevated prices, and a large share of homeowners who are locked into low rates from 2020–2021 and reluctant to sell.