US existing home sales hit weakest pace in over a year

Sales of previously owned homes in the United States slowed last month to their weakest pace in more than a year, as would-be buyers waited for relief on mortgage rates before purchasing.

Contract closings slipped 2 per cent to an annualised rate of 3.98 million in August, data released on Thursday by the National Association of Realtors showed. Last month marked one of only two times since the autumn of 2024 that sales have dipped below 4 million.

The disappointing figures reflect a housing market in desperate need of a catalyst. Home price growth has cooled off from the pandemic era, when annual increases ran into the double digits, but affordability concerns remain a material headwind for buyers.

The median sales price rose 1.6 per cent from a year ago to US$429,100, extending a streak of annual price increases dating back to mid-2023.

Mortgage rates, now at their highest levels in more than a year, also provide a disincentive to move, especially for people who refinanced a few years ago at borrowing costs less than half that. Nationwide, less than a quarter of outstanding mortgages have rates above 6 per cent, according to a recent housing report from Apollo Global Management.

“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,” NAR Chief Economist Lawrence Yun said in a statement.