Mortgage rates climbed to a more than one-year high in August, dampening buyer enthusiasm and pulling home sales lower. Data from the National Association of Realtors (NAR) released Thursday showed existing home sales fell 2% month-over-month in August, translating to a seasonally adjusted annual rate of 3.98 million units — the weakest pace in over a year and a 1.2% drop compared with the same month in 2025.

Throughout August, mortgage rates hovered in the 6.6% to 6.7% range, a level that priced out a significant number of prospective buyers. Last week, rates touched 6.71%, marking the highest point since mid-2025. Mortgage costs have continued to drift upward recently, driven by a global bond selloff and firmer oil prices.

NAR Chief Economist Lawrence Yun noted that home sales tend to move inversely to mortgage rates, which have been climbing steadily since February. He added that the latest leg up in bond yields bodes particularly poorly for the near-term outlook on home sales.

Looking at the regional breakdown, sales were flat only in the West, while every other part of the country posted month-over-month declines. The Northeast, where home prices are the steepest, suffered the largest drop at 4%. Across the board, the market remains sluggish as buyers grapple with severe affordability strains.

Despite weak transaction volumes, tight supply has kept upward pressure on prices. The median existing-home price in August was $429,100, up 1.6% year-over-year. Even with the current downturn, sales activity so far this year is still tracking ahead of 2025, thanks in part to comparatively lower mortgage rates earlier in the year. Total transactions for 2026 are running about 1.6% higher than the same period last year, with 2025 finishing at a dismal level of just over 4 million sales.