The United States housing market showed signs of stabilization in August, with existing-home sales experiencing a minimal decline of 0.2% from the previous month. Despite the slight dip in sales volume, the median home price continued its upward trend, rising for the 26th consecutive month compared to the previous year, according to a new report from the National Association of REALTORS® (NAR).
This data suggests a market balancing high mortgage rates and limited inventory against persistent buyer demand. The seasonally adjusted annual rate of sales settled at 4.0 million, while the national median price for an existing home reached $422,600.
Key Takeaways
- Sales Volume: Existing-home sales decreased by a marginal 0.2% month-over-month but were up 1.8% year-over-year.
- Median Price: The median sales price rose 2.0% from August 2024 to $422,600, marking over two years of consistent annual price growth.
- Housing Inventory: The number of homes for sale fell slightly to 1.53 million units, representing a 4.6-month supply at the current sales pace.
- Regional Differences: Sales performance varied across the country, with the Midwest and West seeing increases while the Northeast and South saw declines.
National Housing Market Overview
Data released on September 25, 2025, from the NAR provides a detailed look at the health of the U.S. residential real estate market. The report confirmed that total existing-home sales, which include single-family homes, townhomes, condominiums, and co-ops, were nearly unchanged in August, registering a seasonally adjusted annual rate of 4.0 million units.
While this figure represents a minor 0.2% drop from July, it marks a 1.8% increase when compared to the same period last year. This year-over-year growth indicates a modest recovery from the slower pace seen in the previous year, even as the market navigates economic headwinds.
Understanding the Data
The term "seasonally adjusted annual rate" represents what the total number of sales for the year would be if the pace of sales for that specific month continued for 12 months. This adjustment helps to account for predictable seasonal variations, such as higher sales activity in the summer.
NAR Chief Economist Lawrence Yun commented on the market's condition, noting the factors that have constrained activity.
"Home sales have been sluggish over the past few years due to elevated mortgage rates and limited inventory," Yun stated. "However, mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months."
Persistent Price Growth and Inventory Challenges
A defining characteristic of the current market is the relentless rise in home values. The median existing-home price for all housing types in August was $422,600, a 2.0% increase from the $414,200 median price recorded in August 2024. This marks the 26th consecutive month of year-over-year price increases, highlighting the ongoing affordability challenge for many potential buyers.
Inventory Remains Tight
The total number of available homes for sale at the end of August was 1.53 million units. This is a 1.3% decrease from July's inventory levels. However, compared to one year ago, inventory is up by 11.7%, offering some relief to buyers.
At the current sales pace, the unsold inventory equates to a 4.6-month supply. This figure is unchanged from July but up from 4.2 months in August 2024. A market is generally considered balanced when there is a 6-month supply of homes, indicating that conditions still favor sellers.
Market Dynamics Explained
According to Lawrence Yun, the market is experiencing a split. "Record-high housing wealth and a record-high stock market will help current homeowners trade up and benefit the upper end of the market," he explained. "However, sales of affordable homes are constrained by the lack of inventory."
A Tale of Four Regions
The national sales figures mask significant variations at the regional level. The Midwest and West saw modest sales growth in August, while the Northeast and South experienced declines.
Northeast
Sales in the Northeast fell by 4.0% from July to an annual rate of 480,000, which is also 2.0% lower than a year ago. Despite the sales slowdown, this region saw the largest price jump, with the median price increasing by 6.2% year-over-year to $534,200.
Midwest
The Midwest was the strongest-performing region. Sales increased by 2.1% month-over-month and 3.2% year-over-year, reaching an annual rate of 960,000. The median price in the Midwest was $330,500, up 4.5% from last year. Yun noted that affordability is a key driver, stating, "The median home price in the Midwest is 22 percent below the national median price."
South
In the South, sales decreased by 1.1% from July but were up 3.4% from a year ago, with an annual rate of 1.83 million. The median price saw a slight increase of 0.4% year-over-year to $364,100.
West
The West saw sales climb by 1.4% for the month to an annual rate of 730,000. However, this was still 1.4% below the rate from August 2024. The median price in the West was $624,300, a modest 0.6% increase from the previous year.
Key Buyer and Seller Metrics
The NAR's REALTORS® Confidence Index for August sheds light on the behavior of buyers and sellers in the current market. These metrics provide a deeper understanding of who is buying and how transactions are being financed.
- Time on Market: Properties typically remained on the market for 31 days in August, an increase from 28 days in July and 26 days in August 2024. This suggests a slight cooling in the pace of transactions.
- First-Time Homebuyers: This group accounted for 28% of sales, unchanged from the previous month but up from 26% a year ago.
- Cash Sales: All-cash transactions made up 28% of sales, down from 31% in July but up from 26% last year.
- Investors and Second Homes: Individual investors or second-home buyers were responsible for 21% of transactions, a slight increase from 20% in July.
- Distressed Sales: Foreclosures and short sales remained a small fraction of the market at 2%, unchanged from the prior month.
Mortgage rates, a critical factor for most buyers, saw a slight decrease. According to Freddie Mac, the average 30-year fixed-rate mortgage was 6.59% in August, down from 6.72% in July but still higher than the 6.50% rate from a year ago.
