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US Existing Home Sales Fall to 3.98M as Rates Top 7%
Why did US existing home sales fall to a 14-month low?
US existing home sales fell 2% to 3.98 million in August, a 14-month low, as 30-year mortgage rates crossed 7% for the first time since May 2025 and the Fed hiked Wednesday.
Key numbers
| Existing home sales (Aug 2026, annualized) | 3.98 million-2.0% MoM; -1.2% YoY; 14-month low |
|---|---|
| 30-year fixed mortgage rate | 7.07%First time above 7% since May 2025 (per [6]) |
| Housing inventory | 1.62M units; 4.9 months supply+3.2% MoM in units; highest months supply since 2015, per NAR |
| Median existing-home sale price | $429,100+1.6% YoY; 38th consecutive month of year-on-year gains |
| Federal funds rate (post-hike) | 3.75%–4.00%+25 bps; first hike since July 2023; unanimous 12-0 vote |
What happened
US existing home sales fell 2% to 3.98 million in August, a 14-month low, as 30-year mortgage rates crossed 7% for the first time since May 2025 and the Fed hiked Wednesday. The National Association of Realtors said inventory reached a 4.9-month supply — the most in over ten years, per NAR chief economist Lawrence Yun — yet rising prices and rates kept most buyers away. The median sale price was $429,100, up 1.6% from a year ago, marking 38 straight months of year-on-year price gains even as the Fed raised its benchmark rate to 3.75%–4.00% in a unanimous 12-0 vote. Sales have now declined two months in a row.
Why it matters
The US housing market has become one of the clearest pressure points of the current rate cycle: more homes sit unsold than at any point in a decade, yet prices keep rising because supply remains far below pre-pandemic norms. For millions of Americans who rent or want to move, each hike makes homeownership harder to reach — a 7% mortgage rate on a median-priced home means a monthly payment of about $2,640, up 3% from a year ago. The Fed's dot plot shows 16 of 18 officials expect at least one more hike before year-end, so relief is unlikely soon.
Who this affects
- MarketbearishHigh impact
- Homebuilder ETF (ITB) down 19.5% YTD; stocks under broad pressure.
- CompanybearishHigh impact
- Lennar missed Q3 earnings and cut its 2026 delivery target.
- CompetitorsbearishMedium impact
- D.R. Horton, PulteGroup, and Toll Brothers also deeply negative YTD.
- IndustrybearishHigh impact
- Builder confidence at 12-month low; 38% of builders cutting prices.
D.R. Horton vs Lennar, PulteGroup, Toll Brothers
| D.R. HortonDHI:NYSE | $39.3B | +1.5% | — | 12.6x |
|---|---|---|---|---|
| LennarLEN:NYSE | $19.2B | +1.7% | -44.6% | 12.6x |
| PulteGroupPHM:NYSE | $22.3B | +1.1% | — | 11.0x |
| Toll BrothersTOL:NYSE | $12.4B | +1.3% | — | 10.0x |
As of 2026-09-17
How we got here
US-Israel strikes on Iran spark energy shock; mortgage rates start rising from near 4-year lows
Existing sales fall to 3.98M as rate shock hits spring market
Sales rebound to 4.17M as markets stabilize post-Iran shock
August sales released at 3.98M; 30-year daily rate hits 7.07%
Fed hikes 25 bps to 3.75–4.00%; first hike since July 2023; unanimous vote
What to watch
- Next FOMC meeting; dot plot implies another 25bps hike likely2026-10-27
- September existing home sales; watch for further decline below 3.98M2026-11-19
- DHI and PHM Q3 earnings; new-order trends signal spring 2027 demandQ4 2026
Educational content only. Not investment advice.
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