WASHINGTON, Sept 10(Reuters) – U.S. existing home sales dropped to a 14-month low in August as rising mortgage rates continued to suppress demand.
Home sales fell 2.0% last month to a seasonally adjusted annual rate of 3.98 million units, the lowest level since June 2025, the National Association of Realtors said on Thursday. Economists polled by Reuters had forecast home resales easing to a rate of 3.98 million units.
Existing home sales are counted at the closing of a contract. Last month’s sales likely reflected contracts signed in June and July. Mortgage rates maintained their upward trend over the two months, with the popular 30-year fixed rate averaging 6.66% at the end of July.
It surged to an average of 6.71% last week, the highest in more than a year, data from mortgage financing firm Freddie Mac showed. Mortgages rates are tracking long-term U.S. government bond yields, which have jumped amid concerns over inflation because of the war with Iran, uncertainty over monetary policy and a ballooning government debt. The average rate on the 30-year mortgage has soared more than 70 basis points since the U.S. and Israel attacked Iran in late February.
“It’s not surprising to see a mild dip in home buying activity due to high mortgage rates,” said Lawrence Yun, the NAR’s chief economist.
In August, home sales dropped in the Northeast, Midwest and South. Sales held steady in the West. Overall sales declined 1.2% on a year-over-year basis in August.
Existing housing inventory increased 3.2% to 1.62 million units, the highest level since November 2019. Supply was up 5.9% from a year ago. At August’s sales pace, it would take 4.9 months to exhaust the current inventory of existing homes, up from 4.6 in July and a year ago.
The median existing home price last month increased 1.6%
from a year ago to $429,100. First-time buyers accounted for 30%
of sales, up from 29% in July and 28% a year ago. A 40% share in this category is needed for a robust housing market.
The median number of days on the market for listed properties increased to 31 from 29 in July, but were unchanged from a year ago. Distressed sales, including foreclosures,
were unchanged at 2%.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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