Sales of previously occupied homes in the United States experienced a decline in July due to record-high prices and soaring mortgage rates. The National Association of Realtors (NAR) reported a 1.7% decrease in existing home sales from June, reaching a seasonally adjusted annual rate of 4.06 million units. This figure slightly surpassed economists’ expectations, which were at a 4.05 million pace, as noted by FactSet.
Despite the monthly decline, sales in July exceeded figures from the previous year by 0.7%. Home prices continued their upward trend, reaching historical highs for July. The U.S. median sales price climbed 2% from the previous year, hitting $434,100. June saw the median sales price peak at $442,800, marking an all-time high since data began in 1999, according to NAR. Home prices increased annually for 37 consecutive months.
Freddie Mac’s update last week highlighted a rise in the benchmark 30-year fixed-rate mortgage to 6.69%, its highest level in over a year. This was the fifth consecutive weekly increase in average rates, further challenging potential homebuyers facing steep borrowing costs.
“No one who has a home already can afford to sell it,” stated Carl Weinberg, chief economist at High Frequency Economics. “People with ultra-low COVID-era mortgages cannot afford to give them up. If no one is selling, no one can be buying, and inventories are low.”
For three years, home sales have hovered near an annual pace of 4 million, far below the historical norm of approximately 5.2 million. The U.S. housing market has been sluggish since mortgage rates began climbing in 2022, stalling sales at a 30-year low.
Home sales continue to struggle as mortgage rates have mostly risen since the onset of the conflict between the U.S. and Iran. Rising oil prices and anticipated higher inflation have caused long-term bond yields, which guide home loan pricing, to increase, leading to higher mortgage rates. Additionally, the inventory of homes remains below historical levels.
By the end of July, there were 1.54 million unsold homes, representing a 1.9% drop from June and 0.6% decrease from July last year, according to NAR. This inventory level falls short of the typical 2 million homes for sale before the COVID-19 pandemic.
July’s end-of-month inventory translates to a 4.6-month supply at the current sales pace. A balanced market between buyers and sellers typically involves a 5- to 6-month supply.
Regionally, the Northeast saw prices increase more rapidly than other parts of the country, with a 5.2% year-over-year rise, driven by limited inventory.
The NAR reported that 29% of July’s sales involved first-time homebuyers, down from 33% in June but slightly up from 28% in July 2025. Historically, first-time buyers account for about 40% of home sales.