Elevated Rates Slow Home Sales as Buyer Demand Softens (Zillow August Market Report)
With newly pending sales declining and mortgage costs rising, Zillow expects softness in the for-sale market as rental demand picks up.
- Home sales fell 0.6% year over year in August, a deceleration from July’s 6% annual gain, according to Zillow’s August Market Report.
- Newly pending listings, a leading indicator of future closings, fell 2.6% year over year in August, extending a rapid deceleration from June’s 7.5% annual gain — even as the number of homes for sale continues to climb.
- The rental market shows signs of absorbing sidelined demand, with rents rising 2.5% year over year, nearly double the rate of home value growth.
Home sales slipped 0.6% year over year in August and fell sharply from July. Mortgage rates holding above 6.5% — their highest level in a year — kept many buyers on the sidelines. Newly pending listings, a forward-looking measure of demand, fell 2.6% from a year ago, a sign that the slowdown could continue through the remainder of the year.
August’s closed sales largely reflect contracts signed in July, when elevated rates were already discouraging many would-be buyers. The typical U.S. home value rose 1.3% from a year ago to $369,678, according to the Zillow Home Value Index, and the monthly mortgage payment on the typical home was 2% higher than last year. Rents are climbing, too, up 2.5% year over year to $1,948 nationwide, giving prospective buyers little relief on either side of the rent-versus-own equation. That annual rent growth figure is also reaccelerating, up from 2.3% last month and 2% a year ago, suggesting the rental market is absorbing some of the demand that has shifted away from the for-sale market.
Inventory continues to offer a modest bright spot, with 1.41 million homes for sale nationwide, up 3% from a year ago. But new listings fell 7.9% from July, and the share of listings with a price cut edged up to 26.3% — half a percentage point above last year — 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, with mortgage rates above 6.5% as the primary culprit. The combination of weak sales and even weaker pending sales points to a soft close to 2026. While more homes are for sale than a year ago, many households will likely stay 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.
- The Zillow Home Value Index (ZHVI) fell 0.1% month over month in August. 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. That is 2% higher than last year.
Inventory
- There were 1.41 million homes for sale nationwide in August.
- 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
- 339,927 homes were sold in August, according to Zillow’s sales count nowcast.
- That is 0.6% lower than a year earlier, and down 10.7% from July.
Competition
- Homes took a median of 27 days to go pending in August. That’s the same as last year and two days longer than July.
- The share of listings with a price cut in August was 26.3%. That was up 0.5 percentage points from a year earlier and down 0.8 percentage points from July.
- 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.
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.
- 39.2% of rental listings on Zillow offered a concession in August. That’s 2.5 percentage points higher than a year earlier and down 0.6 percentage points from July.
| Zillow August Market Report | ||||||||
| Metro Area* | Typical Home Value (ZHVI) | Home Value Change: MoM | Home Value Change: YoY | Inventory Change: YoY | Sales Count Nowcast Change: YoY | Typical Rent (ZORI) | Rent Change: MoM | Rent Change: YoY |
| United States | $369,678 | -0.1% | 1.3% | 0.2% | -0.6% | $1,948 | 0.2% | 2.5% |
| New York, NY | $739,324 | 0.4% | 5.2% | -3.5% | -2.3% | $3,615 | 0.2% | 4.2% |
| Los Angeles, CA | $957,612 | -0.3% | 1.4% | 0.5% | -2.0% | $2,941 | 0.2% | 1.6% |
| Chicago, IL | $359,782 | 0.3% | 5.1% | -0.4% | 4.9% | $2,210 | -0.1% | 4.9% |
| Dallas, TX | $361,463 | -0.3% | -1.9% | -1.3% | -2.1% | $1,659 | 0.1% | 0.4% |
| Houston, TX | $305,386 | -0.3% | -1.8% | -1.1% | -4.0% | $1,643 | 0.0% | 0.0% |
| Washington, DC | $575,362 | -0.5% | 0.3% | -2.6% | -3.5% | $2,433 | 0.2% | 0.8% |
| Philadelphia, PA | $390,935 | -0.1% | 2.5% | -0.2% | -2.7% | $1,911 | 0.4% | 3.6% |
| Miami, FL | $477,919 | 0.2% | 0.5% | -2.6% | -1.0% | $2,666 | 0.2% | 1.6% |
| Atlanta, GA | $377,813 | -0.4% | -1.5% | 0.6% | -0.8% | $1,853 | 0.3% | 2.0% |
| Boston, MA | $737,482 | -0.2% | 2.3% | -4.2% | 0.1% | $3,074 | -0.7% | 2.4% |
| Phoenix, AZ | $442,171 | -0.4% | -1.0% | -0.9% | -1.4% | $1,722 | 0.1% | 0.7% |
| San Francisco, CA | $1,134,525 | -0.3% | 3.3% | -1.1% | 2.5% | $3,409 | 1.7% | 10.8% |
| Riverside, CA | $583,081 | -0.1% | 0.4% | -0.9% | -0.7% | $2,541 | 0.3% | 2.8% |
| Detroit, MI | $267,999 | -0.1% | 1.8% | 5.0% | -1.6% | $1,524 | 0.4% | 3.8% |
| Seattle, WA | $730,623 | -0.8% | -1.6% | 0.0% | -6.5% | $2,278 | 0.2% | 1.7% |
| Minneapolis, MN | $390,396 | -0.2% | 1.7% | 1.4% | 4.4% | $1,719 | 0.1% | 3.5% |
| San Diego, CA | $934,936 | -0.4% | 1.0% | -2.0% | -6.3% | $2,994 | 0.3% | 2.0% |
| Tampa, FL | $359,285 | -0.1% | -0.6% | -1.4% | 2.7% | $2,001 | 0.1% | -0.1% |
| Denver, CO | $562,732 | -0.5% | -1.5% | 0.0% | -1.6% | $1,922 | -0.1% | -0.6% |
| Baltimore, MD | $400,583 | -0.4% | 0.4% | 0.2% | 3.7% | $1,948 | 0.3% | 2.6% |
| St. Louis, MO | $277,084 | -0.1% | 3.3% | -0.5% | -5.3% | $1,443 | 0.2% | 3.9% |
| Orlando, FL | $383,656 | -0.2% | -1.4% | -1.0% | 5.8% | $1,942 | 0.0% | 0.7% |
| Charlotte, NC | $384,369 | -0.4% | -0.7% | -1.5% | -2.4% | $1,749 | 0.2% | 1.0% |
| San Antonio, TX | $276,834 | -0.3% | -1.8% | -0.5% | 5.7% | $1,422 | 0.2% | -1.3% |
| Portland, OR | $545,374 | -0.3% | 0.1% | -0.4% | 1.4% | $1,818 | 0.3% | 0.6% |
| Sacramento, CA | $576,967 | -0.3% | 0.2% | -1.3% | 3.5% | $2,282 | 0.3% | 1.7% |
| Pittsburgh, PA | $232,967 | 0.1% | 0.3% | -0.3% | -6.5% | $1,469 | 0.0% | 3.4% |
| Cincinnati, OH | $309,495 | -0.2% | 2.3% | -1.8% | 3.7% | $1,522 | 0.2% | 2.6% |
| Austin, TX | $419,900 | -0.5% | -4.2% | -3.2% | 2.0% | $1,622 | 0.1% | 0.0% |
| Las Vegas, NV | $423,354 | -0.5% | -2.8% | 1.8% | 2.1% | $1,742 | -0.3% | 0.1% |
| Kansas City, MO | $329,538 | 0.0% | 3.8% | -0.5% | 1.7% | $1,529 | 0.3% | 3.6% |
| Columbus, OH | $331,866 | -0.1% | 1.3% | -0.5% | 6.3% | $1,521 | 0.5% | 2.6% |
| Indianapolis, IN | $294,343 | -0.1% | 1.0% | 2.9% | -2.7% | $1,552 | 0.3% | 3.3% |
| Cleveland, OH | $255,245 | 0.3% | 4.0% | 1.6% | 1.4% | $1,454 | 0.3% | 4.5% |
| San Jose, CA | $1,544,638 | -1.0% | 0.3% | 0.2% | -5.7% | $3,815 | 1.0% | 7.6% |
| Nashville, TN | $453,322 | -0.2% | -0.3% | 0.7% | 1.0% | $1,813 | 0.2% | 0.8% |
| Virginia Beach, VA | $374,765 | 0.0% | 2.9% | 0.6% | 3.4% | $1,891 | 1.0% | 6.6% |
| Providence, RI | $528,018 | 0.1% | 3.7% | 2.3% | -1.5% | $2,167 | 0.1% | 4.3% |
| Jacksonville, FL | $351,487 | -0.1% | 0.0% | -2.2% | -1.0% | $1,696 | 0.2% | 1.8% |
| Milwaukee, WI | $391,398 | 0.1% | 5.5% | -1.4% | -2.9% | $1,563 | 0.3% | 5.0% |
| Oklahoma City, OK | $246,105 | 0.0% | 1.1% | 2.4% | -4.9% | $1,388 | 0.2% | 2.3% |
| Raleigh, NC | $431,407 | -0.4% | -1.6% | -1.4% | 4.7% | $1,675 | 0.3% | 0.8% |
| Memphis, TN | $244,845 | -0.2% | 0.1% | -0.5% | 0.8% | $1,400 | -0.1% | 1.0% |
| Richmond, VA | $396,305 | -0.1% | 2.7% | 3.5% | -3.6% | $1,729 | -0.2% | 2.5% |
| Louisville, KY | $280,808 | -0.3% | 1.6% | 1.7% | -0.2% | $1,348 | 0.0% | 1.6% |
| New Orleans, LA | $261,012 | -0.3% | 1.6% | -0.8% | -2.7% | $1,598 | 0.0% | 1.4% |
| Salt Lake City, UT | $562,551 | -0.2% | 1.0% | 6.2% | 0.1% | $1,641 | 0.1% | 0.5% |
| Hartford, CT | $404,670 | 0.2% | 5.2% | 1.0% | 1.2% | $2,034 | 0.3% | 3.2% |
| Buffalo, NY | $292,435 | 0.3% | 3.7% | 5.2% | -3.8% | $1,449 | 0.5% | 3.5% |
| Birmingham, AL | $263,461 | 0.0% | 2.5% | 0.4% | 1.0% | $1,433 | 0.8% | 2.0% |
*Table ordered by market size
