August 2026 Housing Market Report: Buyers Gain Leverage as Higher Rates Cool Demand

The housing market is sending some mixed signals heading into the second half of summer. Closed sales improved in July and home prices are still holding up in most parts of the country, but buyers are becoming harder to find as mortgage rates remain elevated. That shift is giving people who are still shopping for a home more choices and more room to negotiate.

At Nuvision Credit Union, we keep a close eye on these changes because housing costs, mortgage rates, and home values can have a major impact on your financial decisions. Here’s what the latest numbers from Steven Thomas, Zillow, Redfin, and the National Association of REALTORS show about where the market stands in August.

Steven Thomas: Orange County Buyers Have More Time, Especially in the Condo Market

Orange County’s housing market continued to slow as summer moved into August, with active inventory reaching 5,046 homes. That is nearly identical to the 5,071 homes available at this time last year, but it remains well below the pre-pandemic average of 6,753 homes. Buyer demand increased slightly to 1,494 pending sales, although that remains 7% below last year and 43% below the 2017-2019 average.
The result is an Expected Market Time of 101 days, compared with 95 days last year and 78 days during the years before the pandemic. That means homes are generally taking longer to sell, giving buyers more time to evaluate their options and negotiate.

One of the biggest changes is happening in the condominium and townhome market. Attached homes now have an Expected Market Time of 114 days compared with 93 days for detached homes. Attached inventory is 17% higher than last year, while demand is 8% lower. By comparison, detached inventory is down 11% from last year.

Affordability is part of the problem. Condos and townhomes remain significantly less expensive than detached homes, but rising HOA dues, insurance costs, special assessments, higher mortgage rates, and tighter condominium lending requirements are eating into that advantage. The median Orange County HOA payment for attached properties sold in June was $507 per month.

Those pressures are also beginning to show up in prices. Attached home values declined 0.3% over the  last couple of months, while detached values increased slightly. On a year-over-year basis, attached values were up just 0.4%, compared with a 1.9% increase for detached homes.

Zillow: Strong July Closings May Not Continue

Nationally, Zillow reported a 7% year-over-year increase in home sales during July, the strongest annual gain of 2026 so far. But those closings largely reflect deals that went under contract earlier in the summer, when mortgage rates were more favorable.

The forward-looking numbers tell a different story. Newly pending listings were up only 0.3% from last year and dropped 7.7% from June. Zillow believes that could mean July represents a high point for sales growth this year, with flat or declining transaction volumes possible in some areas during the second half of 2026.

Inventory continues to slowly improve. Zillow counted approximately 1.41 million homes for sale nationwide in July, 1.5% more than a year ago. New listings were also up 3.1% year-over-year.

Prices, however, have not fallen nationally. Zillow’s Home Value Index put the typical U.S. home value at $371,757, up 1.1% from last year. Homes also took a median of 25 days to go pending, one day longer than last year and five days longer than in June.

Mortgage Rates Remain the Biggest Obstacle

There was some encouraging economic news in early August. Softer employment data and slightly cooler inflation reduced some of the pressure that had been pushing rates higher. According to Zillow, July CPI inflation slowed to 3.4% year-over-year from 3.5% the previous month.

That gives the Federal Reserve more room to hold rates steady in the near term, but Zillow does not expect a dramatic decline in mortgage rates. Its forecast calls for rates to finish 2026 around 6.5%, compared with 6.2% at the end of 2025.

For buyers, that means affordability is likely to remain the central issue. Even modest changes in mortgage rates can significantly change the monthly payment on a home, particularly at today’s prices.

Redfin: There Are Now 51% More Sellers Than Buyers

Perhaps the clearest indication of how much negotiating power has shifted comes from Redfin.

Redfin estimates that there were about 1.46 million sellers actively in the market during July compared with roughly 967,000 buyers. That means sellers outnumbered buyers by 51.3%, just below the record 51.8% gap reached in December 2025.

The estimated number of buyers fell 2.5% in July to the lowest level in Redfin’s records. Seller numbers declined too, but only 0.3%, leaving nearly half a million more sellers than buyers.

According to Redfin, nearly 80% of the major metropolitan areas it tracks now qualify as buyer’s markets.

This does not mean homes have suddenly become inexpensive. In many cases, the opposite is true. High prices and mortgage rates are a major reason buyers have stepped away. But for households that can afford to purchase, fewer competing buyers can create opportunities to negotiate over price, closing costs, repairs, contingencies, or other terms that were much harder to negotiate when homes were receiving multiple offers.

NAR: Home Prices Keep Rising Even as Sales Slow

The National Association of REALTORS reported that existing-home sales fell 1.7% from June to July to a seasonally adjusted annual rate of 4.06 million. Compared with July 2025, however, sales were still 0.7% higher.

Home prices also continued to increase. The national median existing-home price reached $434,100 in July, up 2% from a year earlier. That marked the 37th consecutive month of year-over-year price increases.

Housing inventory stood at 1.54 million units, representing a 4.6-month supply at the current sales pace.

There are also large differences between markets. NAR’s second-quarter report found that home prices increased in 80% of U.S. metropolitan areas, up from 71% during the first quarter. The national median single-family existing-home price increased 1.5% from a year earlier to $434,900.

The affordability picture improved somewhat as incomes gained ground against home prices. NAR’s Housing Affordability Index increased to 103.3 in July from 98.3 a year earlier. But higher mortgage rates continue to offset some of those gains.

Key Takeaways

1. Buyers are gaining negotiating power. Redfin estimates that sellers now outnumber buyers nationally by more than 50%, while Orange County homes are taking longer to sell.
2. July’s strong sales numbers may be misleading. Zillow reported a 7% year-over-year increase in closed sales, but newly pending listings fell 7.7% from June, pointing toward softer activity ahead.
3. Home prices are still holding up. NAR reported a 2% annual increase in the median existing-home price, while Zillow reported national home values 1.1% above last year.
4. Mortgage rates remain the biggest hurdle. Even with softer inflation and employment data, Zillow expects mortgage rates to end 2026 around 6.5%, keeping monthly payments elevated.
5. More choices do not necessarily mean cheap housing. Much of today’s buyer leverage exists because high prices and borrowing costs have pushed other buyers out of the market.
6. Orange County condos and townhomes face additional pressure. Longer market times, rising HOA expenses, stricter financing standards, and weaker demand are creating a noticeably softer market for attached properties than for detached homes.

What It Means for You

For buyers, this is a very different housing market than the bidding-war environment of a few years ago. There are fewer competing buyers, homes are generally taking longer to sell, and sellers may be more willing to negotiate. That can create an opportunity for someone who is financially prepared to buy, even though affordability remains challenging.

For sellers, pricing matters more than it has in recent years. Buyers have more choices and appear increasingly willing to walk away from homes they believe are overpriced. Properties that are priced appropriately and presented well can still sell, but the market is becoming less forgiving of sellers who start too high and expect buyers to chase them.

The biggest wildcard remains mortgage rates. A meaningful move lower could bring sidelined buyers back into the market relatively quickly. If rates remain near current levels, however, the combination of high monthly payments and cautious buyers will likely continue to keep the market slower and more negotiable.

For more than 90 years, Nuvision Credit Union has helped members navigate major financial decisions through changing economic conditions. Whether you’re thinking about buying, selling, refinancing, or simply trying to understand what today’s housing market means for your finances, knowing the numbers can help you make the decision that works best for you.