Home Sales in August Tumbled to Lowest Level Since Last Year

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Home Sales in August Tumbled to Lowest Level Since Last Year

The 2% monthly decline in existing-home sales reflected higher mortgage rates and a housing market stuck in a rut

By Nicholas G. Miller, WSJ

Sept. 10, 2026 10:00 am ET

Home sales in August fell to their lowest level in more than a year, after rising mortgage rates dealt another blow to a hobbled housing market.

Sales of existing homes declined 2% in August over the previous month to a seasonally adjusted annual rate of 3.98 million, the National Association of Realtors said Thursday. That is the lowest since June 2025, when the rate was 3.93 million.

The decline in sales was roughly in line with expectations. Economists surveyed by The Wall Street Journal had forecast a 2.2% drop.

The housing market is now well into its fourth year of stagnant sales. Mortgage rates jumped after the beginning of the war in Iran and have continued rising toward 7% as hopes for a clean end to the conflict fade.

Meanwhile, home prices continued to climb. The national median existing-home price in August rose 1.6% from a year earlier, to $429,100, NAR said.

The slowdown in existing-home sales marks a continuation from July, when home sales fell 1.7%.

Last week, mortgage rates, which are tied to the 10-year Treasury yield, rose even higher following a bond-market selloff driven by investors’ fears of stubborn inflation and soaring government deficits.

On Thursday, the 10-year yield rose to 4.9%, its highest level since 2023, a day after the Treasury Department said it would buy back up to $6 billion in longer-term debt in its Thursday buyback operation.

The 30-year fixed rate averaged 6.76% this week, according to Freddie Mac, up from 6.23% in April and below 6% in February.

The real-estate industry had been hopeful that this year would mark the beginning of the housing market’s recovery. Inventory has improved slightly as some homeowners have lost patience and decided to move even if it means stomaching high rates. NAR said unsold inventory in August rose 3.2% from July to 1.62 million units.

Meanwhile, home-buying demand is also being supported by wage growth and job creation, said NAR Chief Economist Lawrence Yun.

But with conflict in the Middle East intensifying, rates are unlikely to fall soon, meaning the affordability challenge for home buyers will remain sizable, economists say.

“What would have to happen for mortgage rates to come down is a big drop in uncertainty and I don’t see that coming,” said Homes.com Chief Residential Economist Brad Case.

Matt Roemer agreed to buy a home in January at a rate of under 6%, but he pulled out during escrow following an inspection. Since then, rates have surged, prompting Roemer to start looking in cheaper neighborhoods. For now, he is stuck renting.

“I just worry that I’m flushing money down the drain a little bit as I kind of pay to a landlord,” he said.

But he would rather do that than pay a mortgage he is uncomfortable with, especially since there is little sign there will be an opportunity to refinance soon.

“A year ago there was a little more confidence that we were going to get into a rate decrease cycle. There’s a little less confidence in that now,” he said.

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