Sales of pre-owned homes in the United States decelerated in July due to soaring prices and the highest mortgage rates seen in a year, deterring many potential buyers. The National Association of Realtors reported that existing home sales dropped by 1.7% last month to reach a seasonally adjusted annual rate of 4.06 million units, slightly exceeding economists’ expectations. However, July sales showed a 0.7% increase compared to the previous year.
Home prices continued their upward trend, reaching unprecedented levels in July with the median sales price in the U.S. rising by 2% to $434,100 from a year earlier. Mortgage rates surged to 6.69%, the highest level in over a year, according to Freddie Mac’s latest data. Lawrence Yun, NAR’s chief economist, noted that despite the challenging mortgage rate environment, home sales have remained relatively stable, emphasizing that a return to average mortgage rates near 6% could significantly boost the housing market.
Since 2022, the U.S. housing market has been struggling, with home sales remaining stagnant as mortgage rates climbed from pandemic-induced lows. The inventory of unsold homes at the end of July stood at 1.54 million, down 1.9% from June and slightly lower than the previous year. This level of supply translates to a 4.6-month supply at the current sales pace, below the balanced market range of 5 to 6 months.
In the Northeast region, home prices continued to rise rapidly, increasing by 5.2% year-over-year due to inventory shortages. NAR reported that first-time homebuyers accounted for 29% of sales in July, down from 33% in June but slightly higher than the figure from July 2025. Typically, first-time buyers make up around 40% of total home sales.
