Mortgage Rate Shock Stalls Housing Market as 8-Month Growth Streak Collapses

Stubbornly high mortgage rates finally took their toll on buyer demand in August, snapping an eight-month streak of pending sales growth even as sellers slashed prices.The share of listings in pending status fell 0.2% from a year ago, marking the first negative readout since November 2025, according to the latest Realtor.com® monthly housing market trends report released on Wednesday. A sale is listed as pending when a seller has accepted an offer from a buyer, but the deal has not yet closed. The pending home sales rate is a crucial indicator of the housing market's health because it helps predict the rate of finalized home sales a month or two later.Pending sales have been losing steam since May, when the growth rate reached a selling-season peak of 4.8%. That coincided with a steady climb in mortgage rates driven by the ongoing conflict in the Middle East, which put upward pressure on oil prices and fueled inflation fears.The average rate on 30-year fixed home loans hit its 2026 high of 6.69% on Aug. 6, according to Freddie Mac. Rates hovered in that range for the next three weeks amid bond market volatility, closing out the month at 6.66%—up more than 20 basis points from early...