Housing inventory grows as sales momentum fades in August

On the purchase side of the U.S. housing market, listing activity in August offered mixed signals as mortgage borrowing costs climbed above year-ago levels, according to Realtor.com’s latest monthly housing report.

Active listings were 1.2% higher in August compared to July, reflecting more than 3% annual growth despite a more than 5% monthly decline in new listings activity.

While the report described the fall in new listings as a “typical seasonal pullback heading into late summer,” it still reflects a 0.1% decline from last August, underscoring the hesitance of current homeowners thinking about selling their properties.

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New listings were 1.5% higher in the West, however.

“It’s hard to say how much of August’s slowdown is seasonal versus real headwinds finally catching up,” said Jake Krimmel, senior economist at Realtor.com, who authored the report.

Growth in active inventory occurred across all four major U.S. regions last month, with Midwest markets clocking a more than 10% annual rise. The Northeast trailed close behind, posting annual active listing growth of more than 9%.

Even that annual growth in active listings came with a caveat, however, with the report noting that the gains had “more to do with inventory growth decelerating last August, thanks in large part to last year’s delisting wave, than any true signal in this August’s data.”

A historically wide seller-buyer divide did not translate into widescale delisting this August, signaling resilience on the part of sellers sticking it out through sluggish demand.

Delistings were down 12.6% from a year ago in August, an improvement from June’s 8.3% decline and July’s 4.7% dip.

Pending sales reflected as listings under contract posted their first annual decline since last November, falling 0.2% from a year ago. That ended eight consecutive months of rising pending sales activity, Realtor.com reported.

But slow demand continued to erode pricing power in August as higher inventory levels simultaneously offer homebuyers more options in the market — and theoretically, stronger negotiating leverage with sellers.

The median list price of $424,500 declined annually for a 10th consecutive month in August, sliding 1% lower than July and 1.3% lower than a year ago. About one-fifth of listings had a price reduction in August, exactly the same rate as last year.

Steadily rising mortgage rates that have been above year-ago levels since the end of July ultimately present a formidable challenge for homebuyers and sellers heading into the last part of 2026, said Krimmel. That’s especially true for sellers trading in ultra-cheap, pandemic-era mortgage rates anywhere from 2.5% to 4% lower than current market rates.

“Regardless of whether it’s due to dog days of summer seasonality or real signal, housing activity is slowing for now,” Krimmel concluded.