Existing-home sales slip below 4 million as inventory hits a decade high

Sales of existing homes fell 2.0% in August to a seasonally adjusted annual rate of 3.98 million, the first reading under 4 million since June 2025, the National Association of Realtors reported on September 10. Sales were 1.2% below August 2025. Inventory moved the other way: 1.62 million homes were on the market, up 3.2% on the month and 5.9% on the year, and at the current sales pace that is 4.9 months of supply, the most since 2015.

More homes listed while fewer change hands means more sellers waiting and fewer buyers furnishing a new place. In August turnover slowed while prices kept rising.

The numbers behind the headline

Single-family sales ran at 3.62 million, down 1.9% from July and 1.1% from a year earlier, while condo and co-op sales fell 2.7% on both measures to 360,000, according to Mortgage News Daily's breakdown. The median existing-home price rose 1.6% from a year ago to $429,100, the 38th straight month of year-over-year gains, with single-family homes at $434,800 and condos at $371,600. Homes took a median 31 days to sell, up from 29 in July. First-time buyers made up 30% of sales, against 28% a year earlier.

Every region but the West sold fewer homes than in July. The Northeast fell 4.0% to a 480,000 pace, the Midwest 3.1% to 940,000 and the South 1.6% to 1.84 million, while the West held flat at 720,000. Year over year the South was unchanged and the other three regions were down between 2.0% and 2.7%. The Northeast median was up 4.3% and the Midwest 3.3%, while the West's $619,100 median slipped 0.2%.

The average 30-year mortgage rate for the month was 6.67%, per Freddie Mac. "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 rates," NAR chief economist Lawrence Yun said, adding that inventory at its highest level in over ten years gives buyers more room to negotiate. Despite the August dip, sales through the first eight months of 2026 are running 1.6% ahead of the same period last year, and NAR's affordability index improved to 104.7 from 101.2 a year earlier.

What the retailers and the Fed are seeing

Home Depot's chief financial officer, Richard McPhail, told analysts on August 18 that "housing affordability and historically low housing turnover continue to weigh on demand for larger projects," even as the chain's comparable sales rose 1.7% and transactions over $1,000 grew 2.4%, per MarketBeat's summary of the call. Executive vice president Billy Bastek said portable power and patio sold well while larger discretionary projects remained under pressure.

The Federal Reserve's latest Beige Book, covering the period through August 24, reported residential real estate activity falling in the San Francisco district on higher borrowing and insurance costs, retailers in the Chicago district placing smaller holiday orders than a year ago, and furniture lagging other consumer goods in port volumes, Home News Now reported. A Bank of America Institute study cited in the same publication's look at smaller home purchases found household mobility down across income groups and generations, which matches an August of rising listings and falling closings.

In January existing-home sales were down 4.4% year over year and 8.4% on the month, the freeze we described in our May brief on the housing market. August's 1.2% annual decline is milder, and year-to-date sales are 1.6% ahead of last year. Inventory has grown 5.9% over the year while closings have slipped 1.2%, so the supply is building faster than it is selling.

Where this lands for furniture demand

Why it matters: A furniture seller cannot count on new-household demand this fall. With closings under 4 million and mortgage rates near 6.7%, the whole-house purchase that follows a move is scarce. First-time buyers, the group most likely to furnish from scratch, were 30% of a shrinking pool of sales, and the rest of the market is households that are staying put and replacing what they already have. That favors categories that sell without a move: replacement seating, bedroom, storage and outdoor. It also favors sellers whose listings and prices win the comparison shop, because with sales down 1.2% from a year ago any growth has to come out of someone else's share. Turnover is the indicator we plan on, so the 4.9 months of supply matters only once it starts converting into closings. Until it does, 2026 stays a share-gain year.

What it means for our partners: We plan fourth-quarter demand on flat household formation and treat a turnover recovery as upside. Suppliers with strong replacement-purchase categories should hold assortment depth. Those weighted toward whole-room, new-home purchases should expect a quieter season and price to move units this quarter.