It’s more nowhere for now, but a big caution ahead.
The National Association of Realtors reports Existing-Home Sales Decline 2.0 Percent in August.
“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,” said NAR Chief Economist Lawrence Yun. “Still, home prices are rising, and existing home sales are actually up 1.6% year-to-date through the first eight months of the year. 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.”
“The number of months it would take to exhaust the total inventory at the current sales pace has grown to 4.9 months’ supply—its highest level in over ten years. The ample supply of homes for sale on the market is giving homebuyers better opportunities to negotiate,” Yun added.
Yun Nonsense
Year-over-year sales are down, so Yun resorts to a year-to-date number to say something positive.
As for “better opportunities to negotiate”, what a crock. But you really have to love the absurd “Homebuying demand, despite higher interest rates, is no doubt being supported by rising wages”.
If rising wages supported housing, there would be more home buying.
The lead chart says it will be four years of nowhere in two more months.
Existing-Home Sales Month-Over-Month
Changes have been essentially trendless for years.
Key August 2026 Statistics
- Month-Over-Month: 2.0 percent decrease in existing-home sales month-over-month.
- Sales Year-Over-Year: 1.2% decrease in existing-home sales year-over-year to a seasonally adjusted annual rate of 3.98 million. The last time sales activity fell below 4.0 million was in June 2025.
- Inventory Units: 1.62 million units, up 3.2 percent from July and up 5.9 percent from August 2025. This was the first time since November 2019 that inventory exceeded 1.6 million units.
- Inventory Supply: 4.9-month supply of unsold inventory, up from 4.6 months in July and 4.6 months in August 2025.
- Median existing-home price: $429,100: Median existing-home price for all housing types
- Price Change From Year Ago: 1.6% increase from one year ago ($422,400)—the 38th consecutive month of year-over-year price increases.
- Market Time: 31 days: Median time on market for properties, up from 29 days last month, unchanged from 31 days in August 2025
Truly Nonsensical NAR Measures of Affordability
- The Housing Affordability Index registered at 104.7, up from 101.2 a year ago.
- Northeast +0.5%
- Midwest +1.7%
- South +4.5%
- West +5.9%
If homes were more affordable, more homes would be selling.
Existing-Home Sales Year-Over-Year
Existing Home Sales Supply
The NAR does not seasonally adjust much of its data as evidenced by the above chart.
Nonetheless, we can see rising supply over time. But rising supply has not helped sales.
Existing-Home Sales vs Mortgage Rates
There are sometime jumps in sales when rates drop. However, there has not been any lasting traction.
Sales have basically gone nowhere even as rates fell from 7.62 percent to 6.05 percent.
But rates have risen again. The current Mortgage News Daily rate is 7.07 percent.
MND is more accurate than the Freddie Mac data in my chart because it includes points and fees. I use Freddie Mac data because I have a download from the St. Louis Fed.
Three Key Conclusions
- Home prices are too high, mortgage rates are too high, or both, for most people.
- There is a pool of price-insensitive buyers, around 4 million annualized, who are able and willing to buy regardless of point one.
- If we see a sustained decline in the stock market, a recession, or other economic shock, point two will not hold.
Point 3 above is my big caution.
Synopsis
- Real Income falling
- Home prices rising
- Mortgage rates rising
- Yun claims affordability is improving
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Point Three is your big caution. I would say that you are correct on all three points and those points lead to falling prices for homes. In truth, though, I’ve thought this for about three years already, and it hasn’t happened, but, I think it’s inevitable.
You see it on the low end already. There are people that NEED to sell their house, and after it hasn’t sold for some period of time, they drop the price and get it sold. Then, that becomes the new set of comps, and, prices in the area begin to fall to that level.
Next it will be the next higher up level of home (in my area the “low end” is under $300,000, the next level would be the $300k-$500k), and then slowly the entire market will reset.
I’m not talking about massive price drops, but, my guess would be in the 10 – 25 percent on a price per square foot basis (my back of the envelope guess anyway)
Mortgage rates continue to be historically low and real wages are actually keeping up with inflation, Mish. What planet are you getting your data from? On the other hand, who wants to give up their 2 5/8 % rate they got 5 yrs ago. Little Johnny (25-40 years olds in US) is living with mommy and daddy 50% of the time-why buy a house when you can live off your parents?