US sales of existing homes declined to a three-month low in July, driven by persistently high prices and rising mortgage rates. According to Michael McKee on "Bloomberg Open Interest," this trend indicates continued pressure on the housing market.
The National Association of REALTORS (NAR) reported a 1.7% month-over-month decrease in existing-home sales, reaching a seasonally adjusted annual rate of 4.06 million units. Despite this monthly dip, sales were up 0.7% year-over-year. The median existing-home sales price increased by 2.0% from a year ago to $434,100, marking the 37th consecutive month of year-over-year price increases. This figure is slightly below June's all-time high of $442,800.
Inventory levels remained low, with 1.54 million unsold homes at the end of July, down 1.9% from June and 0.6% from July 2025. This represents a 4.6-month supply, unchanged from the previous month and a year ago. The average 30-year fixed-rate mortgage was 6.54% in July, up from 6.49% in June, contributing to affordability challenges. First-time homebuyers accounted for 29% of sales, down from 33% in June, while cash sales were 26% of transactions. The Housing Affordability Index showed improvement, rising to 103.3 from 98.3 a year ago.
Lawrence Yun, NAR's Chief Economist, noted that home sales have been "remarkably stable" despite rising mortgage rates, with year-to-date sales up 2.4%. However, he suggested the market would be "thriving" if mortgage rates returned closer to 6%. Carl Weinberg, chief economist at High Frequency Economics, observed that homeowners with low COVID-era mortgages are reluctant to sell, leading to low inventory and sluggish sales, which have hovered near a 4-million annual pace for about three years, significantly below the historical norm of 5.2 million.
