After a whirlwind of pandemic-era price surges and a long spell of high borrowing costs, the U.S. housing market in August 2025 painted a picture of cautious optimism and persistent challenges. Nationally, home sales remained sluggish, but subtle shifts in mortgage rates and inventory levels offered glimmers of hope for both buyers and sellers. Yet, as regional data shows, not all markets are moving in lockstep—some are heating up, others remain stuck in neutral, and affordability remains a stubborn hurdle for many Americans.
According to the Associated Press, sales of previously occupied U.S. homes slipped by 0.2% in August from July, landing at a seasonally adjusted annual rate of 4 million units. This marks the slowest sales pace since June, though it topped economists’ expectations and edged 1.8% higher than August 2024. The National Association of Realtors (NAR) confirmed this trend, noting, “Existing home sales continue to bounce around last year’s bottom.”
Despite the tepid sales, home prices continued their relentless climb. The national median sales price hit $422,600, up 2% year-over-year and marking the 26th consecutive month of annual price increases. This is the highest median price for any August since NAR began tracking the data in 1999. It’s a staggering figure—especially when you consider that the median price is now 52% higher than in August 2019, before the market’s pandemic-fueled surge.
“However, mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months,” said Lawrence Yun, NAR’s chief economist, as quoted by the Associated Press. Indeed, after a summer of gradual decreases, mortgage rates reached their lowest point in 10 months, touching 6.26% in the week before September 27, 2025, according to Freddie Mac.
But even with this drop, borrowing costs remain out of reach for many. Most home purchases in August were negotiated in June and July, when 30-year mortgage rates hovered between 6.85% and 6.72%. While lower rates offer some relief, they’re still not enough to “unlock the vast majority of homeowners, who continue to enjoy sub 6% rates,” said Danielle Hale, chief economist at Realtor.com. “But it will help those on the margins and may lead to a more active fall home sales season.”
One bright spot in the national picture has been the new home market. The U.S. Census Bureau reported that sales of new single-family homes jumped a striking 20.5% in August from the previous month, reaching an annualized pace of 800,000 units. That’s up 15.4% from a year earlier, representing the strongest showing so far this year. Still, new home sales are just a sliver of the overall market—most Americans buy existing homes, where inventory remains tight and affordability is stretched thin.
Inventory, though, is showing signs of life. NAR reported 1.53 million unsold homes at the end of August, down 1.3% from July but up 11.7% from August 2024. This translates to a 4.6-month supply at the current sales pace, which, while still below the pre-pandemic norm of about 2 million homes and a 5- to 6-month supply, suggests some return to balance between buyers and sellers. Homes are also lingering longer: properties typically stayed on the market for 31 days in August, up from 26 days a year earlier, putting pressure on sellers to lower prices or offer incentives. Realtor.com found that just over 20% of homes had their initial listing price reduced in August.
Regionally, the story takes on new shades. In Maine, for example, the market has seen a marked turnaround. As reported by WABI, the median price for a single-family home in August was $409,450, up 2.36% from a year ago. More notably, home sales surged nearly 10% compared to August 2024, and inventory levels reached their highest point since October 2020. “Potential home buyers in Maine have more options than they have had over the past five years,” said Jeff Harris, president of the Maine Association of REALTORS®. The state’s inventory has been building for six consecutive months, giving buyers a rare sense of choice in a market long defined by scarcity.
The national median home price, meanwhile, stood at $427,800 in August, a 1% increase from the previous year, according to Maine Listings. This places Maine’s market just below the national average, but with a much healthier pace of sales growth.
On the Virginia Peninsula, the market’s pulse is a little more complicated. Data from the Real Estate Information Network (REIN) showed that the number of active residential listings in August held steady at 1,585—the same as July—but was up 24% from August 2024. While buyers now have more homes to choose from than at any month in the past three years, settled sales actually fell 4.2% year-over-year to 617 units. Median sale prices, however, continued their upward march, reaching $345,000, a 4.5% increase from a year earlier. James City County stood out, recording a 47.5% year-over-year jump in homes for sale and the highest median sale price on the Peninsula at $535,000.
“Buyers have more homes to choose from than any month in more than three years,” observed Barbara Wolcott, president of REIN’s Board of Directors. She also highlighted that mortgage rates are now at a 10-month low, giving buyers a much-needed boost.
But not all the news is rosy. Pending sales on the Peninsula dipped from July, and the median days on market rose to 27, up from 21 a year earlier. The Month’s Supply of Inventory (MSI) also ticked up to 2.81, indicating a slow but steady increase in available homes. New construction remains a small but important part of the market, with 46 new homes sold via MLS in August—up from July, but still below last year’s level.
Nationally, Zillow forecasts that the total value of housing transactions in 2025 will be 5.6% higher than in 2024, an upward revision from the previous month’s projection. This optimism is tempered by ongoing economic uncertainty, stubbornly high inflation, and a labor market that’s losing steam. “Weak sales are likely due to consumer finances that are increasingly under pressure,” Zillow analysts noted. They project existing home sales to reach 4.1 million in 2025, a modest 0.8% rise from last year.
As mortgage rates began rising again after the Federal Reserve’s September action, affordability remains a central concern. First-time buyers, who once made up 40% of the market, accounted for just 28% of sales last month—a sign that high prices and borrowing costs are still locking many out.
In the end, the U.S. housing market in August 2025 was a study in contrasts: rising prices and persistent affordability challenges on one hand, and slowly growing inventory and pockets of regional strength on the other. Whether these trends will translate into a more balanced, accessible market in the months ahead remains to be seen, but for now, both buyers and sellers are watching the next moves in mortgage rates and the broader economy with bated breath.
