US new-home sales saw a significant decline in July, reaching their lowest level since January, according to Bloomberg. This indicates that rising mortgage rates are actively suppressing demand, despite builders attempting to stimulate the market with price reductions and incentives. Sales of new single-family homes decreased by 10.5% in July, settling at an annual rate of 607,000.
The trend of declining home sales continued into August, with Zillow reporting a 0.6% year-over-year drop in sales for the month, a sharp deceleration from July's 6% annual gain. This slowdown is largely attributed to mortgage rates holding above 6.5%, their highest level in a year. Newly pending listings, which serve as a forward-looking indicator for future sales, also fell by 2.6% year-over-year in August, suggesting that the housing market slowdown is likely to persist through the end of 2026.
Realtor.com's report confirmed that August was a pivotal month where higher mortgage rates significantly impacted housing demand, breaking an eight-month streak of growth in pending sales. The share of listings in pending status declined by 0.2% from a year ago, marking the first negative reading since November 2025. This indicates a challenging environment for buyers, even as the national median asking price continued its downward trend for the tenth consecutive month, falling to $424,500, a 1.3% decrease from last year.
The National Association of Realtors (NAR) reported that existing home sales in August fell 2.5% from July to an annual rate of 3.86 million, missing economist expectations and representing a 4.2% decrease compared to August of the previous year. This marks the slowest annual pace in nearly a year. Despite this, the national median sales price for existing homes increased by 3.1% year-over-year to $416,700, setting a new record high for August. While inventory has shown some improvement, with 1.41 million homes for sale nationwide (up 3% from a year ago), new listings fell by 7.9% from July. The rental market is also showing strength, with typical rents rising 2.5% year-over-year to $1,948, absorbing some of the demand sidelined from the for-sale market.
