Updated

U.S. home sales in August fell to their lowest level in 14 months even as the number of homes for sale climbed to nearly a seven-year high, according to data reported Wednesday. The disconnect between weak demand and abundant supply highlights ongoing affordability challenges facing prospective buyers. Affordability pressure intensified further as the 30-year mortgage rate crossed 7% for the first time in over a year, with 5/1 ARM rates also breaking past 7% as oil prices rose. Rising borrowing costs are compounding the housing market's supply-demand imbalance, making it increasingly expensive to finance a home purchase even as inventory swells.