Homes for sale are piling up across America.
The US housing market recorded its largest supply glut in a decade in August, a sign that prospective homebuyers are struggling to break into the market as the fight against higher mortgage rates and increased economic uncertainty stemming from things like inflation and the Iran war
Given the current pace of sales, the market had 4.9 months of inventory in August, the highest level recorded in over 10 years, according to the National Association of Realtors.
Existing home sales dropped 2% for the month, the association said, citing high mortgage rates as a factor causing the dip in transaction activity.
The average 30-year fixed mortgage rate ticked up to 6.76% in the last week, according to Freddie Mac data, the highest average borrowing costs have been since the summer of 2025.
“The ample supply of homes for sale on the market is giving homebuyers better opportunities to negotiate,” Lawrence Yun, NAR’s chief economist, said in a statement.
Home prices still rose for the month, a sign that demand remains supported overall by rising wages, despite sales dipping recently, the association said. The median sale price rose to $429,100 in August, up 1.6% year-over-year.
The housing market has been locked in a years-long deep freeze, thanks largely to higher borrowing costs that have deterred prospective buyers and incentivized homeowners to stay in place, since many financed their homes at lower rates.
The general expectation is for the housing market to continue to slow, particularly as fears flare about hotter inflation, which has pushed interest rate expectations higher across the economy.
Analysts at Capital Economics said they expect 2026 to be the weakest year for home sales in more than a decade, and predicted that the 30-year mortgage rate would likely stay above the 6% mark for at least the next two years.
In its outlook at the start 2026, Redfin predicted that mortgage rates would remain above the 6% mark for most of the year.
This month, Zillow’s forecast pegged the 30-year fixed rate at 6.79% by the end of the year. The firm added that it expects home sales to remain “challenged.”
