Key facts
- Existing home sales in the U.S. decreased by 1.7% in July, reaching a seasonally adjusted annual rate of 4.06 million units.
- This marks the second consecutive monthly decline in home sales.
- The average rate for a 30-year fixed-rate mortgage has risen significantly, reaching 6.69% last week.
- Housing inventory declined by 1.9% to 1.54 million units.
- The median existing home price saw a year-over-year increase of 2.0%, reaching $434,100.
- First-time homebuyers represented 29% of sales in July.
U.S. existing home sales experienced a second consecutive monthly decline in July, falling 1.7% to a seasonally adjusted annual rate of 4.06 million units, according to the National Association of Realtors. This downturn was anticipated by economists, who had forecast a slight decrease. The sales figures likely reflect contracts signed in May and June, a period when mortgage rates began to rise again after a brief dip. The average rate for a 30-year fixed-rate mortgage has increased by 71 basis points since February, reaching 6.69% last week, its highest level since July 2025. This surge in borrowing costs is discouraging homeowners from selling, exacerbating the existing housing shortage, as many are reluctant to trade their lower fixed-rate mortgages for higher ones. Sales saw decreases in the Midwest and South, while the Northeast experienced an increase and the West remained unchanged. Year-over-year, sales were up 0.7%. Lawrence Yun, NAR's chief economist, stated that the housing market would be thriving if average mortgage rates were closer to 6%. Housing inventory also decreased by 1.9% to 1.54 million units, a 0.6% drop from the previous year. At the current sales pace, it would take 4.6 months to sell all available existing homes, a figure unchanged from June and the prior year. The median existing home price rose 2.0% year-over-year to $434,100. First-time buyers constituted 29% of sales, down from 33% in June, a level significantly below the 40% considered necessary for a robust market. The median time properties spent on the market increased slightly to 29 days from 28 days in June and the previous year, while distressed sales remained stable at 2%.