July/August 2026 Existing-Home Sales: Supply Hits 4-Year High as Sluggish Demand and Cancellations Mount

July/August 2026 Existing-Home Sales: Supply Hits 4-Year High as Sluggish Demand and Cancellations Mount

As the U.S. housing market navigates late summer 2026, leading indicators point to a significant shift in market power toward buyers. High mortgage rates and elevated home prices have kept demand subdued, while a surge in new listings has pushed inventory to its highest level in four years.

Supply and Demand Trends in Late August 2026

According to Redfin’s housing market update for the four weeks ending August 30, 2026, the disconnect between housing supply and demand is widening:

• New Listings Surge: Seasonally adjusted new listings rose 2.1% week-over-week to 383,795, representing an 8% year-over-year increase. This is the highest level of fresh listings since August 2022.
• Active Listings and Months of Supply: Active listings ticked up to 1,511,313 (up 2.4% YoY), pushing the months of supply to 4.0 months (up from 3.7 months). A supply of 4 to 5 months is generally considered a balanced market, signaling a transition out of the severe seller's market of recent years.
• Pending Sales Dip: Pending sales slipped 0.1% week-over-week to 308,282 (down 2.5% YoY), marking the lowest level of pending sales since February 2026.
• Mortgage Rates Remain Elevated: The weekly average 30-year fixed mortgage rate stood at 6.66% for the week ending August 27, according to Freddie Mac. Meanwhile, the daily average mortgage rate hit 6.91% on September 2 (Mortgage News Daily), the highest level in over a year.
• Asking Prices Soften: While the median sale price rose 2.2% YoY to $398,632, the median asking price fell 0.1% YoY to $392,828.¹ This tiny dip suggests that sellers are beginning to moderate their expectations in response to sluggish buyer demand.

Contract Cancellations Hit Nearly 3-Year High

Affordability constraints and increased options have given buyers the confidence to walk away from deals at rates not seen since late 2023. In July 2026, 14% of U.S. homebuying contracts fell through nationally on a seasonally adjusted basis, up from 13.7% in June and the highest rate since November 2023 (14.1%).

This cancellation activity is heavily concentrated in oversupplied Southern markets, which have transitioned into strong buyer's markets:

• Atlanta, GA: 19.8% of home-purchase agreements were canceled in July, the highest in the nation.
• Houston, TX: 19.6% of contracts fell through (up 5.2 percentage points month-over-month).
• San Antonio, TX: 18.7% of contracts were canceled.
• Las Vegas, NV: 18.6% of agreements fell out of contract.
• Orlando, FL: 18.2% of deals were called off.

In contrast, tight seller's markets in the Northeast and West Coast showed extreme contract stability, with cancellations of just 3.5% in Nassau County, NY, 4.1% in San Francisco, and 6.5% in San Jose.

As Redfin Premier agent Juan Castro in Orlando observed:

"Buyers know they have options right now, so they’re pushing harder in negotiations. That can be tough for sellers, but it’s good news for buyers."