US existing-home sales fell in August to their slowest pace in more than a year, even as the supply of homes for sale reached its highest level in nearly seven years. Elevated mortgage rates and record prices continued to hold buyers back.
Sales dropped to the weakest level in 14 months, extending a run of soft demand that has defined the market through 2025 and into 2026. The pullback came despite inventory climbing to its highest point in more than a decade, a combination that normally eases competition for buyers.
Prices, however, kept rising. The median sale price advanced again, adding to the affordability squeeze that has kept many first-time and repeat buyers on the sidelines. The gap between growing supply and falling transactions points to demand weakness rather than a shortage of listings.
Mortgage rates remain the central drag. Borrowing costs have stayed high enough to lift monthly payments well above the levels many households budgeted for, discouraging both purchases and new listings from owners locked into cheaper loans taken out in prior years.
The build-up in inventory reflects homes sitting longer on the market as buyers hesitate. Rising supply typically signals cooling price pressure, but the continued climb in median values shows sellers have not yet adjusted expectations to match thinner demand.
The pattern echoes earlier readings this year. In the spring, high rates dampened what is usually the busiest selling season, and monthly sales figures have repeatedly come in soft. The August data extends that trajectory rather than breaking from it, as detailed in reporting on how record prices continued to deter buyers through the summer.
For prospective buyers, the larger pool of available homes offers more choice but little relief on cost. For sellers, longer listing times and slower sales raise the prospect of price cuts if demand does not recover.
Economists have tied the stalemate to the direction of interest rates. Any meaningful improvement in affordability would likely require a sustained decline in mortgage costs, which have shown limited movement in recent months.
The next monthly sales report is due in October and will show whether the combination of high supply and high prices continues to weigh on transactions heading into the slower autumn season.