U.S. housing market demand slows as mortgage rates rise

The United States housing market experienced a shift in August as rising mortgage rates impacted buyer demand. New home listings saw a week-over-week increase of 1.2% during the four-week period ending August 16, marking the highest level in over three months and the fifth consecutive week of growth.

Despite the increase in inventory, pending home sales have declined. One report indicates pending listings fell 0.2% from a year earlier, breaking an eight-month streak of annual growth. This decline in momentum is attributed to mortgage rates, which rose from an average of 6.05% in February to 6.67% in August.

While sellers have begun to offer more concessions—including price cuts and increased openness to negotiation—these adjustments have not been sufficient to offset the high cost of financing for many prospective buyers. Consequently, many buyers remain on the sidelines due to economic uncertainty and elevated housing costs.