Home sales fall in August despite the highest supply in over a decade

Sales of previously owned homes fell 2% in August from July to 3.98 million units on a seasonally adjusted, annualized basis, according to the National Association of Realtors. The sales activity marked the slowest pace since June 2025 and was felt hardest in the Northeast and Midwest.

Sales were down 1.2% year over year.

This count is based on closings, so contracts likely signed in June and July, when mortgage rates were higher than they were in the spring. Rates moved sharply higher in the middle of July.

“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 Lawrence Yun, chief economist for the Realtors. “Still, home prices are rising, and existing home sales are actually up 1.6% year-to-date through the first eight months of the year.”

Housing supply totaled 1.62 million homes for sale at the end of August, up 3.2% from July and up 5.9% from the year before. At the current sales pace, that represents a 4.9-month supply — the highest level in over a decade, according to NAR.

Despite more supply, prices continue to rise. The median price of a home sold in august was $429,100, up 1.6% from August 2025. That is a new record high for the month of August.

Price gains were strongest in the Northeast, where inventory is lowest. The West was the only region to see median price decline year over year.

Sales continue to be strongest on the highest end of the market. Compared with August 2025, sales of homes priced between $100,000 and $250,000 were down 10%, while sales of homes priced above $1 million were 3.9% higher. The million-dollar-plus range was the only price range that saw increased sales.

Homes are sitting on the market longer, averaging 31 days in August compared with 29 days in July.

Buyers paying entirely in cash made up 27% of August sales, slightly higher than July but down slightly from August of last year. First-time buyers made up 30% of sales, up slightly from both July and from August 2025.

Investors and second-homebuyers, however, fell off compared to 2025 — accounting for just 15% of August sales, down from 21% the year before.