Housing Inventory Gains Ground in August as Price Cuts Match Last Year

Active listings rose 3.6 percent year over year in August to 1.14 million homes, the strongest growth so far this year. New listings pulled back 5.2 percent month over month to 401,760, a typical seasonal decline as sellers retreat before fall, while the share of sellers cutting prices reached 20.4 percent, matching last year's pace for the first time in 2026. The data points to a market where buyers have more choices and sellers are adjusting expectations after a spring and summer of elevated mortgage rates.

Realtor.com reported inventory up 1.2 percent from July and 3.6 percent from August 2025, though still 11.1 percent below pre-pandemic levels. Redfin's weekly tracker through August 23 showed a similar picture, with active listings at 1.5 million, up 1.6 percent year over year and 0.5 percent from the prior week. New listings hit their highest level since April, rising 6 percent year over year, even as pending sales fell 3.1 percent to their lowest since February.

The regional divergence tells the real story. The Midwest led inventory growth with active listings up 10.5 percent year over year, followed by the Northeast at 9.1 percent. The South and West showed modest gains of 1.1 percent and 3.2 percent respectively.

At the metro level, 37 of the 50 largest markets recorded year-over-year inventory growth, up from 34 in July. Minneapolis led with a 32.9 percent increase, followed by Buffalo at 29.8 percent and Seattle at 27.3 percent. These Sun Belt and Midwest markets have seen the sharpest inventory rebounds as rate-sensitive buyers step back and sellers who missed the spring market face longer wait times.

Price cuts are spreading. The 20.4 percent share of listings with reductions matches August 2025, the first time this year that price cuts have caught up to last year's levels. Sellers were trailing by up to two percentage points all spring. The increase was notable in the Midwest, where all 10 major metros saw more cuts than in July. Denver had the highest share at 31.4 percent of listings with price reductions, followed by Columbus at 28.2 percent and Austin at 27.6 percent.

Even markets that avoided heavy cutting earlier in the year are feeling pressure. Boston's price cut share fell 3 percentage points to 14.8 percent, still above the national average a year ago.

Days on market held steady at 60 nationally according to Realtor.com, matching August 2025, but rose in 25 of the top 50 metros compared with 29 in July. Redfin reported 44 days on market, unchanged from July, with the share of homes selling in two weeks flat at 30.8 percent. The median list price declined 2.4 percent year over year to $424,500, while the median sale price inched up 1.9 percent to $400,649, according to Redfin. Run the math: at the late-August 6.66 percent fixed rate, principal and interest on the median list price come to about $2,728 a month, roughly $45 lower than a year ago when the median list was about 2.4 percent higher and rates sat near 6.6 percent. The gap between list and sale prices continues to narrow as buyers refuse to bid above ask in a market with more choices.

Metric	August 2026	Month-over-Month	Year-over-Year
Active listings	1,140,000	+1.2%	+3.6%
New listings	401,760	-5.2%	-0.1%
Median days on market	60	0 days	+1 day
Price reduction share	20.4%	+0.4 pp	+2.8 pp vs 2019

The outlook for September hinges on mortgage rates, and pending purchase demand hinging on the September FOMC decision, and whether sellers who sat out the summer return to the market, with where the Fed's dot plot may land. Freddie Mac's PMMS showed the 30-year fixed rate holding in a 6.65 to 6.69 percent band through late August, tracking a 10-year yield pressing 5 percent as markets price the path ahead. That kept many would-be buyers on the sidelines. Redfin reported pending sales at their lowest level since February, down 3.1 percent year over year. If rates recede into the fall, buyers who have been waiting may re-enter, but the inventory buildup means they will have options. Sellers who need to move before winter face the reality that the market has shifted from the frenzied conditions of 2024 and early 2025.

Watch the September existing home sales report and the upcoming new residential construction data for signs of whether inventory growth continues or sellers pull back. The months' supply metric, which Redfin puts at 3.8 months, remains below the 4 to 5 month level that signals a balanced market. That means buyers still face limited choices compared to historical norms, but the trend lines are moving in their direction. Sellers who are serious about moving before year end should expect longer marketing times and more negotiation on price and concessions.

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