Stubbornly high mortgage rates finally took their toll on buyer demand in August, ending an eight-month streak of impending sales increases even as sellers cut prices.
The share of listings in pending status fell 0.2% from a year ago, marking the first negative reading since November 2025, according to Realtor.com®’s latest monthly real estate market trends report released Wednesday.
A sale is listed as pending when a seller has accepted an offer from a buyer but the deal has not yet closed. The pending home sales rate is a crucial indicator of the health of the real estate market because it helps predict the rate of completed home sales a month or two later.
Pending sales have been losing momentum since May, when the growth rate reached the peak of the selling season at 4.8%. This coincided with a steady rise in mortgage rates due to the ongoing conflict in the Middle East, which drove up oil prices and fueled inflation fears.
According to Freddie Mac, the average interest rate on 30-year fixed home loans reached its 2026 high of 6.69% on August 6. Rates remained in that range for the next three weeks amid volatility in the bond market, closing the month at 6.66% – more than 20 basis points higher than in early July.
“It looks like August was the month where higher mortgage rates actually satisfied real estate demand,” says Realtor.com’s senior economist Jake Krimmelnoting that interest rates were above year-earlier levels at the start of August.
Krimmel adds: “A year ago, at this point, interest rates were declining, so the year-over-year comparison may get even uglier in the coming months.”
Benjamin CohenManaging Director and Senior Vice President of Mortgage Lending at Rate says declining outstanding sales reflect the market’s ongoing affordability challenges.
“Buyers realize that interest rates won’t go back to 3%, but when you combine today’s interest rates with home prices, taxes and insurance, it can still be difficult to justify the monthly payment,” Cohen tells Realtor.com. “When interest rates rose again this summer, it caused some buyers to pause, while others believe the short-term affordability factor will improve as we see stability in the markets.”
Regional divergence
Regionally, the Midwest suffered the most dramatic setback last month, with pending sales falling 4.3% compared to 2025. The West followed with a decline of 3.3%.
“We are seeing concrete evidence of several indicators of a slowdown in the Midwest,” Krimmel says. He attributes this trend in part to the fact that higher interest rates in late summer begin to put a strain on the traditionally cheap region.
In contrast, pending sales rose 1.8% year over year in the South and 1.1% in the Northeast.
Price cuts reach 2025 levels
In addition to upcoming sales, price cuts are another important indicator of market health. In August, 20.4% of active listings saw price drops, reaching last year’s levels for the first time in 2026 after lagging throughout the spring.
In the supply-constrained and in-demand Northeast and Midwest, price reductions were least common, occurring in 14.15% and 19.6% of listings, respectively. In the inventory-rich West and South, 22% and 21.4% of offers were discounted, respectively.
“Both are signs of weaker buyer demand given higher mortgage rates at the wrong time of year,” says Krimmel.
The role of seasonality
The economist emphasizes that there is room for some nuance when interpreting the monthly real estate data and that the August slowdown is likely due not only to economic headwinds but also to seasonal trends.
“It’s a time of year when activity typically decreases rather than increases,” says Krimmel. “Plus, the US just experienced two of the hottest months on record – not ideal weather for house hunting.”
Still, he admits that six months of rising mortgage rates haven’t helped matters.
“Regardless of whether these are seasonal dog days of summer or real signals, housing activity is slowing for now,” he concludes.
Nadia EvangelouChief economist for the National Association of Realtors®, agrees that persistently high mortgage rates had a dampening effect on demand over the summer.
“Mortgage interest rates are the biggest factor,” she tells Realtor.com. “Even a small reduction in interest rates can improve affordability and bring more buyers back, but also mitigate the lock-in effect for homeowners.”
Fewer sellers are throwing in the towel
Good news for buyers is that delistings are down nearly 13% compared to last year’s “cruel summer,” suggesting most sellers have persevered rather than retreating in frustration.
Overall, August real estate data tells the story of a struggling but functioning market.
The national median asking price fell for the 10th straight month to $424,500, down 1.3% from a year ago.
Notably, prices have fallen more slowly than before, with the rate of decline in August being half of July’s 2.4%.
Active listings rose slightly by 3.6% year-over-year, with all four regions gaining inventory for the first time in months. However, new registrations were down slightly nationwide and in most regions, with only the West recording an increase of 1.5%.
Krimmel said declining sales and new listings are signs that the “natural churn” that keeps the real estate market moving has stalled.
However, Cohen argues that a less active market is not necessarily a negative.
“For buyers, a slower market can actually create opportunities,” he says. “There’s more time to make a decision, more negotiating power and potentially more flexibility on the part of sellers. If you find the right house and the payment works, I wouldn’t sit idly by and wait for the perfect market.”
For sellers, Cohen emphasizes that pricing is important and homes that are strategically priced still sell quickly.
What needs to happen for the fall market to accelerate?
At the beginning of September, according to Krimmel, it is important to keep an eye on the progress of delistings and their geographical location: Are more sellers withdrawing from the market and where?
The other important indicators to monitor are price drops and seller strategy. So far in 2026, sellers have been saving less frequently and less heavily, with repeat discounts nearly halved compared to last July.
“Throughout the spring and summer, we praised sellers for their realistic pricing and found that they were rewarded with more homes going under contract than last year,” says Krimmel.
However, this momentum relies on buyers continuing to show up.
“As this tap turns off and interest rates approach the weak season, hovering around 6.7%, more sellers could resort to price cuts or deductions on their homes,” the economist predicts.
Krimmel said mortgage rates need to be cut significantly for upcoming sales to accelerate this fall, similar to last year when they lost about 20 basis points between early and mid-September and settled below 6.2% by Halloween.
“We are still a long way from that this fall,” he says.
According to Evangelou, even gradual interest rate cuts release significant purchasing power.
“A one percentage point cut in interest rates could allow about 5.5 million more households to afford a median-priced home,” says the NAR economist. “We also need more homes in the price ranges buyers can afford. Inventory has improved, but the market still needs more affordable options.”
Meanwhile, Cohen argues that market stability could prove as influential as lower borrowing costs.
“Buyers can budget for a mortgage rate of around 6.75% if they expect it to stay that way,” he says. “It’s a lot harder when prices are changing week to week based on the latest headlines. Give buyers a little more affordability and a little certainty and I think you’ll see more of them fall off the fence.”
