Home Sales Just Fell Again — Even Though There's More Supply Than We've Seen in a Decade

 Home Sales Just Fell Again — Even Though There's More Supply Than We've Seen in a Decade

**Existing home sales dropped 2% in August to the slowest pace in over a year. And the weird part? There are more homes for sale than at any point since 2019. So why aren't buyers biting? Blame mortgage rates near 7% — and a war that just won't quit.**

Let me hit you with a number that sounds like it should be good news: **1.62 million**. That's how many existing homes were for sale at the end of August. It's the first time inventory has topped 1.6 million since November 2019. That's nearly seven years.

At the current sales pace, that works out to **4.9 months of supply** — the highest level in over a decade, according to the National Association of Realtors.

And yet, sales fell. Again.

Existing home sales dropped **2% in August** from July, hitting a seasonally adjusted annual rate of **3.98 million units**. That's the slowest pace since June 2025, and it marks the third straight monthly decline. Year-over-year, sales were down **1.2%**.

So we've got the most inventory in years, and the fewest sales in over a year. What the heck is going on?

## The Mortgage Rate Problem

Here's the simplest explanation: **mortgage rates are killing demand**.

The average rate on a 30-year fixed mortgage hit **6.71% last week** — its highest level in more than a year. By the first week of September, the contract rate had climbed to **6.85%**, according to the Mortgage Bankers Association. And Mortgage News Daily had the 30-year averaging **6.97%** on Wednesday.

NAR's chief economist, Lawrence Yun, put it about as plainly as you can: **"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"**.

And Yun thinks rates could hit **7%** soon, because mortgage rates tend to follow the 10-year Treasury yield — which was sitting at **4.92%** as of Thursday morning.

## The War Connection Nobody's Talking About Enough

So why are rates so high? Because of the war.

Since the U.S. and Iran went to war in late February, oil prices have surged. Higher oil prices mean higher inflation expectations. Higher inflation expectations push up long-term bond yields. And higher bond yields push up mortgage rates.

It's a chain reaction that starts in the Middle East and ends at your kitchen table when you're trying to figure out if you can afford a monthly payment.

## Prices Are Still Going Up — And That's the Real Problem

Here's the part that really stings. Even with all this supply, prices didn't come down. They went **up**.

The median existing-home price hit **$429,100 in August**, up **1.6% from a year ago**. That's a record high for the month of August, based on data going back to 1999. Prices have now risen on an annual basis for **38 straight months**.

Yun noted that the market is "tilting from a sellers market… almost towards a buyers market where buyers are able to negotiate". But let's be real — with rates near 7% and prices at record highs, "negotiating" only gets you so far.

## Where the Pain Is Hitting Hardest

Not all regions are equal. The sales decline was felt hardest in the **Northeast (-4.0%)** and **Midwest (-3.1%)**, with the **South down 1.6%** and the **West essentially flat**.

On the price side, the **Northeast saw the strongest gains** because inventory is tightest there. The **West was the only region to see median prices decline** year-over-year.

## The K-Shaped Housing Market

Here's something that tells you everything about who can still afford to buy: **the only price range that saw increased sales was homes priced above $1 million**. Sales in that bracket were up **3.9%** compared to last year.

Meanwhile, sales of homes priced between **$100,000 and $250,000 were down 10%**.

In other words, the wealthy are still buying. Everyone else is getting squeezed out.

## Who's Actually Buying?

Let's break down the buyer pool for August:

- **All-cash buyers made up 27%** of sales — slightly higher than July, but down a touch from last year

- **First-time buyers accounted for 30%** — up slightly from both July and August 2025

- **Investors and second-home buyers dropped to just 15%** of sales, down from 21% a year ago

So first-time buyers are actually showing up more. That's a good sign. But they're competing in a market where the affordable inventory is shrinking.

## Homes Are Sitting on the Market Longer

Homes averaged **31 days on the market in August**, compared to 29 days in July. That's not a huge jump, but it's a signal. Sellers can't just list their home and expect a bidding war anymore.

## The Silver Lining: Supply Is Finally Here

Okay, let's talk about the one genuinely good piece of news in this report.

**Inventory is at its highest level since November 2019.** Total housing inventory was **1.62 million units** at the end of August, up **3.2% from July** and **5.9% from a year ago**.

Yun said the ample supply is "giving homebuyers better opportunities to negotiate".

And the **Housing Affordability Index** actually improved to **104.7**, up from 101.2 a year ago. Affordability improved across all regions — the West saw the biggest gain at **+5.9%**, followed by the South at **+4.5%**, the Midwest at **+1.7%**, and the Northeast at **+0.5%**.

So the market is slowly rebalancing. It's just happening at a pace that feels glacial if you're trying to buy right now.

## What This Means for You

**If you're a buyer:** You finally have some leverage. More homes are on the market, and they're sitting longer. You can negotiate. You can ask for concessions. But with rates near 7%, your monthly payment is still going to be painful. The question is whether you can stomach it.

**If you're a seller:** Your home might sit longer than you'd like. Pricing it right from day one matters more than ever. And if you're also trying to buy, you're facing the same rate problem as everyone else.

**If you're an investor:** The numbers are telling. Investors have pulled back significantly — from 21% of sales to just 15%. That's a signal that the math isn't working for them at these rates and prices.

## The Bottom Line

Here's the reality: we have the most housing supply in nearly seven years, and we're still seeing sales decline. That tells you everything about how badly high mortgage rates are crushing demand.

The war in the Middle East is driving up oil prices, which is driving up inflation expectations, which is driving up mortgage rates. And with the Fed potentially hiking rates again next week, there's no relief in sight.

Yun put it best: **"Homebuying demand, despite higher interest rates, is no doubt being supported by rising wages, which grew 3.1% in August, along with 643,000 net new jobs added since the start of the year. Job creation and wage growth typically drive housing demand"**.

So the demand is there. The jobs are there. The wages are growing. But the rates are making it impossible for most people to act on that demand.

Until mortgage rates come down — and they won't until the war ends or the Fed changes course — the housing market is going to stay stuck in this weird limbo. More supply, fewer sales, and prices that refuse to budge.

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## Frequently Asked Questions (FAQs)

### 1. How many existing homes were sold in August 2026?

Existing home sales fell **2% from July** to a seasonally adjusted annual rate of **3.98 million units** — the slowest pace since June 2025 and the third straight monthly decline.

### 2. What is the median home price right now?

The median existing-home price was **$429,100 in August 2026**, up **1.6% from a year ago**. That's a record high for the month of August and marks **38 consecutive months** of year-over-year price increases.

### 3. How much housing supply is on the market?

There were **1.62 million homes for sale** at the end of August — the first time inventory has exceeded 1.6 million since November 2019. That represents a **4.9-month supply**, the highest in over a decade.

### 4. What are mortgage rates right now?

The average 30-year fixed mortgage rate is hovering around **6.7% to 6.97%**, depending on the source. It hit **6.71%** last week, its highest level in over a year, and could be approaching **7%**.

### 5. Why are home sales falling when there's more supply?

Because **mortgage rates are too high**. NAR's chief economist Lawrence Yun said, "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".

### 6. Which regions are seeing the biggest sales declines?

The **Northeast (-4.0%)** and **Midwest (-3.1%)** saw the steepest declines. The **South was down 1.6%**, and the **West was essentially flat**.

### 7. Are prices still rising?

Yes. Prices rose **1.6% year-over-year** in August. The **Northeast** saw the strongest gains, while the **West** was the only region where median prices declined.

### 8. Who is still buying homes?

**First-time buyers** made up **30%** of August sales, up slightly from last year. **All-cash buyers** accounted for **27%**. **Investors and second-home buyers** dropped to just **15%** of sales, down from 21% a year ago.

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## Disclaimer

*This article is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. The views expressed are based on publicly available data from the National Association of Realtors, the Mortgage Bankers Association, Mortgage News Daily, and other cited sources as of September 10, 2026. Housing market conditions, mortgage rates, and economic data are subject to rapid change. The author does not endorse any specific investment strategies or real estate decisions. Before making any financial or real estate decisions based on the content of this article, please consult with qualified professionals who can evaluate your specific situation.*