Contract closings fell 0.2% last month to an annualized rate of 4 million, according to National Association of Realtors figures released Thursday. Economists surveyed by Bloomberg anticipated 3.95 million. Sales have been stuck around the 4 million level since March.

The median sales price, meantime, rose 2% from a year ago to $422,600, extending a string of straight year-over-year gains since mid-2023, NAR data show. Prices remain out of reach for many Americans, having risen more than 50% since the pandemic.

"Home sales have been sluggish over the past few years due to elevated mortgage rates and limited inventory," NAR Chief Economist Lawrence Yun said in a statement. "However, mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months."

Mortgage rates have fallen over the past two months in anticipation that the Federal Reserve would start lowering interest rates again — which the central bank did last week. But economists predict the housing market will trudge along until the US sees deeper declines in borrowing costs, which are still almost double what they were at year-end 2021. 

The affordability crunch, however, is slowly easing. Two-thirds of the U.S.'s most populous metropolitan areas were buyer's markets last month, meaning sellers outnumber buyers by at least 10%, according to research from online housing marketplace Redfin. 

Helping to temper price growth is a gradual increase in the supply of homes on the market this year. In August, the inventory of previously owned homes for sale fell for the first time in 2025, slipping 1.3% to 1.53 million, still near the highest in more than five years, NAR data show.  The slight decline in homes for sale may reflect more sellers choosing to de-list their properties from the market, because they may not be fetching the price they want, Yun said on a conference call. 

Existing-home sales in the South, the country's biggest home-selling region, decreased 1.1% to an annualized rate of 1.83 million. Sales saw gains in the West and Midwest, while they fell 4% in the Northeast.

Individual investors or second-home buyers purchased 21% of homes last month, compared with 20% a month earlier. And, first-time buyers accounted for 28% of closings, unchanged from July. 

An increasing share of buyers are looking for work-from-home features — 36% compared with 30% a year ago — based on NAR data, Yun said.

August sales of new homes, a smaller part of the housing market, came in far higher than expected on Wednesday, rising 20.5% over the previous month. However, these data are volatile on a month-to-month basis and only time will tell if it's a sign of rebound.

The National Association of Realtors will give another look at the previously owned home market on Monday with the release of its pending-home sales report for August. Existing homes typically go under contract a month or two before they're sold. 

--With assistance from Chris Middleton.