US home sales flat in August even as mortgage rates ease

US existing home sales remained subdued in August, with the market showing little sign of a turnaround despite a late-summer slide in mortgage rates.

According to the National Association of Realtors (NAR), sales of previously occupied homes edged down 0.2% from July to a seasonally adjusted annual rate of 4 million units, the slowest pace since June.

While that figure topped economists’ expectations, it underscored the persistent challenges facing buyers and sellers alike.

The housing market has been in a prolonged slump since 2022, when mortgage rates began their climb from historic lows.

“Home sales have been sluggish over the past few years due to elevated mortgage rates and limited inventory,” Lawrence Yun, NAR chief economist, said.

“However, mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months.”

Fannie Mae’s Economic and Strategic Research Group predicted that 30-year mortgage rates will fall to 6.4% by the end of 2025 and drop further to 5.9% by late 2026.

Despite the month-over-month dip, sales in August were up 1.8% compared to the same period last year. The national median sales price rose 2% year-over-year to $422,600, marking the 26th consecutive month of annual price gains.

Inventory, however, remains a sticking point. Total housing inventory slipped 1.3% from July to 1.53 million units, representing a 4.6-month supply—still considered lean by historical standards.

Affordability divides the market

Market dynamics diverged across regions. The Midwest posted a 2.1% sales increase from July and a 3.2% jump year-over-year, buoyed by a median home price 22% below the national average.

“The Midwest was the best-performing region last month, primarily due to relatively affordable market conditions,” Yun said.

In contrast, the Northeast saw a 4% monthly decline and a 2% drop from last year, while the South and West experienced mixed results.

The upper end of the market outperformed the lower end, with sales of homes priced above $1 million climbing 8% year-over-year. On the other hand, sales of homes below $100,000 fell more than 10%.

“Record-high housing wealth and a record-high stock market will help current homeowners trade up and benefit the upper end of the market. However, sales of affordable homes are constrained by the lack of inventory,” Yun said.

Mortgage rates drop, but buyers remain cautious

Mortgage rates averaged 6.59% for a 30-year fixed loan in August, down from 6.72% in July, according to Freddie Mac. While the recent rate drop has improved some buyers’ purchasing power, affordability remains a hurdle for many Americans after years of surging prices. Properties lingered on the market for a median of 31 days in August, up from 26 days a year ago. First-time buyers accounted for just 28% of transactions, while all-cash sales also made up 28%.

The NAR data was released in the wake of US Census Bureau and Department of Housing and Urban Development's figures revealing that new-home sales surged to a seasonally adjusted annual rate of 800,000 in August 2025, the fastest pace since early 2022.