US existing home sales drop to 14-month low in August

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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