Zillow Warns Housing Slowdown Could Extend Through Year-End
According to the Zillow 2026 August Housing Market Report, home sales fell 0.6% year over year in August and dropped sharply from July.
Zillow noted that mortgage rates holding above 6.5% — their highest level in a year — kept many buyers on the sidelines. And newly pending listings, a forward-looking measure of demand, dropped 2.6% from a year ago, a sign that the slowdown could continue through the remainder of the year.
The brokerage said that August’s closed sales largely reflect contracts signed in July, when elevated rates were already discouraging many potential buyers.
Zillow said that the typical U.S. home value rose 1.3% from a year ago to $369,678, citing the Zillow Home Value Index, and the monthly mortgage payment on the typical home was 2% higher than last year. It said rents are climbing 2.5% year over year to $1,948 nationwide.
Annual Rent Growth
That gives prospective buyers little relief on either side of the rent-versus-own equation, Zillow noted. That annual rent growth figure is also reaccelerating, up from 2.3% last month and 2% a year ago, which suggests the rental market is absorbing some of the demand that has shifted away from the for-sale market, Zillow said.
The brokerage said inventory remains a modest bright spot, with 1.41 million homes for sale nationwide, up 3% from a year ago. Zillow noted that new listings fell 7.9% from July, and the share of listings with a price cut edged up to 26.3%. That’s half a percentage point above last year and is a sign that sellers are still having to adjust expectations to meet the market.
The for-sale housing market took a step back in August, Zillow said, with mortgage rates above 6.5% seen as the primary culprit. The combination of weak sales and even weaker pending sales points to a soft close to 2026, the brokerage noted. More homes are up for sale than a year ago, and many households likely will remain on the sidelines until rates ease, as renting remains the more affordable option.
Home Values & Mortgage Payments
The typical U.S. home value is $369,678, Zillow said.
The Zillow Home Value Index dropped 0.1% month over month in August, and home values are 1.3% higher than a year earlier. The monthly mortgage payment on a typical U.S. home is $1,897, assuming a 20% down payment and including estimates for taxes, insurance and maintenance. Zillow said that is 2% higher than last year.
Inventory
There were 1.41 million homes for sale nationwide in August, according to Zillow. It said active inventory was 3% higher than a year earlier. Inventory rose 0.2% from July. New for-sale listings totaled 356,934 in August, up 2.4% from a year earlier and down 7.9% from July.
Sales
Zillow said that 339,927 homes were sold in August, according to its sales count nowcast. That is 0.6% lower than a year earlier, and down 10.7% from July, Zillow said.
Competition
Homes took a median of 27 days to go pending in August, Zillow said, which is the same as last year and two days longer than July. The share of listings with a price cut in August was 26.3%, which was up 0.5 percentage points from a year earlier and down 0.8 percentage points from July.
Some 29.6% of homes sold above list price in July, the most recent data available. That was 0.8 percentage points higher than a year earlier and 1.1 percentage points lower than June, Zillow said.
Rents
The typical rent nationwide is $1,948, according to the Zillow Observed Rent Index. That’s 2.5% higher than a year earlier, and up 0.2% from July, Zillow noted. Zillow said that 39.2% of rental listings on its website offered a concession in August. That’s 2.5 percentage points higher than a year earlier and down 0.6 percentage points from July.
