Existing-home sales fell 2% in August, dropping below a 4 million annual pace for the first time since June 2025.
Buyers have more choices: Housing inventory climbed to 1.62 million homes, the highest level since 2019.
Prices are still rising despite slower sales, with the median existing-home price increasing 1.6% from a year ago to $429,100.
The housing market lost more momentum in August as elevated mortgage rates discouraged buyers, but a growing supply of homes for sale could be starting to shift some bargaining power away from sellers.
Existing-home sales fell 2% from July to a seasonally adjusted annual rate of 3.98 million, according to the National Association of Realtors. Sales were also 1.2% below August 2025 levels. It was the first time the annual sales pace had fallen below 4 million since June 2025.
NAR Chief Economist Lawrence Yun pointed to borrowing costs as a major reason for the slowdown. The average rate on a 30-year fixed-rate mortgage was 6.67% during August, compared with 6.54% in July and 6.59% a year earlier.
Yun said higher mortgage rates tend to suppress home sales, making August's decline unsurprising. At the same time, he noted that existing-home sales during the first eight months of 2026 were still 1.6% higher than during the comparable period last year. Rising wages and job creation are also providing some support for housing demand.
More homes for buyers to choose from
Perhaps the most significant development for consumers is the increase in homes available for sale.
Total housing inventory reached 1.62 million units at the end of August, an increase of 3.2% from July and 5.9% from a year earlier. It marked the first time since November 2019 that inventory exceeded 1.6 million homes.
At the current sales pace, there was a 4.9-month supply of unsold homes, up from 4.6 months in July. NAR said that was the highest months' supply in more than a decade.
That's potentially good news for buyers. More inventory means shoppers may have less pressure to make quick offers and could have greater leverage to negotiate the selling price, closing costs or repairs.
Homes also took slightly longer to sell. The typical property remained on the market for 31 days in August, compared with 29 days in July.
Prices aren't falling
In a normal situation, when sales decline, so do prices. However, more inventory hasn't translated into lower prices, at least not yet.
The median price of an existing home was $429,100 in August, up 1.6% from $422,400 a year earlier. That marked the 38th consecutive month in which prices increased on a year-over-year basis.
There were significant regional differences. Sales fell 4% in the Northeast and 3.1% in the Midwest from July. They declined 1.6% in the South and were unchanged in the West. The Northeast had the strongest price growth, with its median price rising 4.3% from a year earlier to $556,900. Midwest prices increased 3.3% to $340,400, while prices in the South rose just 0.7% to $366,500.
The West was the only region where prices declined, slipping 0.2% from a year ago to a median of $619,100.
First-time buyers gain a little ground
First-time buyers accounted for 30% of August transactions, up from 29% in July and 28% a year earlier. Meanwhile, 27% of transactions were all-cash purchases.
For prospective buyers, the August report presents a mixed picture. Mortgage rates remain a significant affordability obstacle, and home prices continue to rise nationally. But growing inventory means consumers who can afford to buy may encounter a less competitive market than they did a few years ago.
NAR's Housing Affordability Index also improved to 104.7 from 101.2 a year earlier, with affordability improving in all four regions.