The average weekly mortgage rate, at 6.76%, is not high historically. Inflation is high. And home prices are high.

By Wolf Richter for WOLF STREET.

Sales of existing single-family homes fell by another 1.9% in August from July, seasonally adjusted, the third month in a row of declines, to an annual rate of just 3.62 million sales, according to data by the National Association of Realtors today.

Sales were down by 1.1% from the already crushed levels a year ago, by 25% from August 2019, by 9% from August 2009 during the Housing Bust, and by 5% from 30 years ago in August 1996, scraping along the bottom of the four-year plunge.

Supply of single-family homes rose to 4.7 months in August, same as in the summer of 2016, and all were the highest since November 2015.

Supply is a function of inventory and sales – how much inventory there was at month-end in relationship to sales during the month. Sales sank further, while inventories rose further to 1.42 million single-family homes for sale.

Sales of condos and co-ops fell by 2.7% in August from July, seasonally adjusted, to an annual rate of 360,000, matching the record low in the data that go back only to late 2011.

Compared to the crushed levels a year ago, sales fell by 2.7%. Compared to August 2019, sales plunged by 39%. Compared to August 2012, the first August in the data, sales plunged by 35%.

Supply of condos rose to 6.6 months, along with May 2025, the highest since 2012.

Sales by region.

Sales of existing homes (single-family, condos, and co-ops combined) fell month-to-month in three of the four regions, and in the West was unchanged from the downwardly revised July sales. All of them near the bottom of the dumpster.

In the South, the seasonally adjusted annual rate of sales fell by 1.6% in August from July, the third month in a row of declines, to 1,840,000 homes.

Compared to August in prior years:

• 2025: 0% (year-over-year)
• 2024: +4.0%
• 2023: 0%
• 2022: -12.4%
• 2019: -20.0%
• 2018: -18.2%

In the West, the seasonally adjusted annual rate of sales was 720,000 homes, same as the downwardly revised July sales.

Compared to August in prior years:

• 2025: -2.7% (year-over-year)
• 2024: -2.7%
• 2023: -2.7%
• 2022: -19.1%
• 2019: -36.8%
• 2018: -35.7%

In the Midwest, the seasonally adjusted annual rate of sales fell 3.1%, to 940,000 homes, fourth month in a row of declines.

Compared to August in prior years:

• 2025: +2.1% (year-over-year)
• 2024: +4.3%
• 2023: 0%
• 2022: -19.2%
• 2019: -23.6%
• 2018: -23.6%

In the Northeast, the seasonally adjusted annual rate of sales fell by 4.0%, to 480,000 homes.

Compared to August in prior years:

• 2025: -2.0% (year-over-year)
• 2024: -2.0%
• 2023: 0%
• 2022: -22.6%
• 2019: -31.4%
• 2018: -31.4%

Mortgage rates are not high; inflation and home prices are high.

The average 30-year fixed mortgage rate rose to 6.76%, according to Freddie Mac’s weekly measure today.

In a five-decade context, mortgage rates at this level are not high. They’re only high in the context of the Fed’s financial repression that began in 2008 and – with a pause – lasted into 2022 (green box in the chart below). During this period of financial repression, the Fed bought trillions of dollars of Treasury securities and mortgage-backed securities (MBS) to repress mortgage rates and other interest rates and inflate home prices and other asset prices. This experiment ended in 2022 with the highest consumer price inflation in 40 years and a historic two-year home price explosion that has since then morphed into the “affordability crisis” and crushed home sales.

Mortgage rates in that near 7% range are at the lower end of the spectrum before the Fed’s financial repression started.

National median price v. local prices.

The national median price of single-family homes declined along seasonal patterns to $434,800 in August, not seasonally adjusted. Year-over-year, it was up by 1.7%.

The “affordability crisis” was caused by the 40% explosion of the national median price in the two years through mid-2022 that had come on top of already high prices.

Since late 2022, national wages have increased faster than the national median price of single-family homes, thereby easing very slowly, over many years, the affordability crisis.

The price explosion ended in June 2022. Over the four-plus years since then:

• National median price of single-family homes: +3.3% through A
• Average hourly earnings: +17.3% through August.
• Consumer Price Index (CPI): +12.8% through July.

But for people buying or selling a home, the national median price is unrelated to their endeavors. What matters to them are local prices, and they vary dramatically. And in some of those markets, the affordability crisis has softened by quite a bit through the combination of rising wages and falling home prices, for example:

Prices of single-family homes fell by 11% to 26% in 15 bigger markets, including:

• Austin, TX: -26%
• Oakland, CA: -24%
• Cape Coral, FL: -22%
• New Orleans, LA: -20%

But in some other bigger cities, prices of single-family homes have continued to rise to new highs and worsened the affordability crisis. The biggest cities with the biggest year-over-year gains:

• Chicago: +4.9%
• Rochester: +4.4%
• New York City: +4.1%
• Milwaukee: +3.5%.

The national median price of condos and co-ops declined along seasonal lines in August. Year-over-year, it was up by 1.5%.

But the affordability crisis has softened substantially in many condo markets, as condo prices in those markets have taken a drubbing, including by 15% to 33% from peak in 33 bigger markets, with several dropping below their highs in 2006:

• Cape Coral, FL: -33%
• Oakland, CA: -32%
• Petersburg, Fl: -30%
• Austin, TX: -28%
• Fort Myers, FL: -27%
• Sarasota County, FL: -24%
• Garland, TX: -22%
• Tampa, FL: -21%.

See my analysis of condo prices with 33 charts: Oh Dear, Condo Prices Fell by 15% to 33% in 33 Bigger Markets, Some Below 2006 Levels, as Historic Condo Bubbles Deflate.

The national median condo price is just about irrelevant to condo buyers and sellers anywhere. Cape Coral, for example:

In case you missed it: What the Infamous “Inventory Shortage” Looks like: Inventory of New Single-Family Homes Jumps, Prices Drop to Lowest since 2021, Sales Sag

 

 

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