Previously owned home sales declined in August, with the National Association of Realtors reporting a 2% month-over-month drop to 3.98 million units on a seasonally adjusted, annualized basis. Year-over-year sales were down 1.2%, representing the slowest sales activity since June 2025. The Northeast and Midwest regions experienced the most pronounced weakness in transaction volume.
Mortgage rate increases in mid-July, when many of these August closings were contracted, contributed to the sales slowdown. Chief economist Lawrence Yun noted the inverse relationship between mortgage rates and purchase activity. However, he pointed out that year-to-date existing home sales were up 1.6% through the first eight months, indicating resilience despite recent monthly weakness.
Housing inventory surged to 1.62 million homes available for sale at the end of August, rising 3.2% from July and 5.9% year-over-year. This supply level represented a 4.9-month inventory, marking the highest supply position in more than a decade according to NAR data. Despite the increased inventory, median home prices continued their upward trajectory, reaching $429,100 in August, up 1.6% from August of the previous year and setting a new record high for the month.
Price growth was uneven across regions, with the Northeast showing the strongest gains despite having the lowest inventory levels. The West was the only region to experience a year-over-year median price decline. The luxury segment demonstrated particular strength, with sales above $1 million rising 3.9% compared with the prior year, while more affordable homes in the $100,000 to $250,000 range saw sales fall 10%.
Additional market dynamics included homes remaining on the market for an average of 31 days in August, compared with 29 days in July. Cash purchases represented 27% of transactions, while first-time buyers accounted for 30% of sales. Investor and second-home buyer activity weakened significantly, declining to 15% of sales from 21% in the prior year.
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