Existing U.S. Home Sales Drop to Slowest Pace in Over a Year Amid Rising Mortgage Rates and Prices
Sales of previously owned U.S. homes fell in August, marking the slowest annual pace in more than a year due to rising mortgage rates and home prices. According to the National Association of Realtors (NAR), existing home sales dropped by 2% from July to an annual rate of 3.98 million units — below economists' expectations of around 4 million. This marks three consecutive monthly declines, with sales also down 1.2% compared to August last year. The housing market has been constrained largely due to rising borrowing costs since the U.S.-Iran conflict began in late February, which led to higher inflation and bond yields that influence mortgage rates. The average rate on a 30-year fixed mortgage reached 6.76%, its highest level in over 14 months. Despite this slowdown, home prices continued an upward trend, with the median sales price hitting $429,100 — up 1.6% year-over-year and setting a new August record. The Northeast region saw the fastest annual price growth at 4.3%, driven by low inventory levels relative to other regions. While home inventory increased slightly in August compared to July, it remains well below historical norms.
Topics: Economic Impact Home Sales Mortgage Rates