July Home Sales Fell as Rates and Prices Kept Buyers Back

Sales of previously occupied U.S. homes fell again in July as buyers faced mortgage rates near 6.7%, elevated prices and limited inventory.

The National Association of Realtors reported that existing-home sales declined 1.7% from June to a seasonally adjusted annual rate of 4.06 million units. Sales were still 0.7% higher than in July 2025, making the latest report a monthly setback in a weak market rather than a collapse.

NAR’s measure covers previously occupied single-family homes, condominiums and cooperatives. The figures show a market that remains near historically low transaction levels as financing costs and limited supply reinforce each other.

Mortgage rates remain a major obstacle

Freddie Mac said its national average for a 30-year fixed mortgage was 6.67% on Aug. 13, down from 6.69% on Aug. 6. The average was still above the 6.58% recorded a year earlier.

The small weekly decline has not materially changed the affordability challenge for many households. Higher rates increase the monthly payment on a given loan, leaving buyers with less room for property taxes, insurance, maintenance and other housing costs.

Freddie Mac’s figure is a national benchmark, not a guaranteed offer. Actual mortgage quotes vary with a borrower’s credit, down payment, loan type, lender and other factors.

The timing also matters: July home-sale closings generally reflect purchase contracts negotiated earlier, while the Aug. 13 mortgage reading describes conditions facing new borrowers now.

Prices remain high while supply stays below a balanced level

NAR reported a July median existing-home price of $434,100, up 2% from a year earlier. It was the highest median price for the month of July in NAR’s historical series. Prices have risen year over year for 37 consecutive months, according to NAR.

June’s median price reached $442,800, the highest monthly level in NAR’s data going back to 1999. The July figure was lower than June’s record but still underscored how elevated prices remain.

There were 1.54 million unsold homes at the end of July, down 1.9% from June and 0.6% from July 2025. That represented 4.6 months of supply at the current sales pace. A 5- to 6-month supply is commonly viewed as a more balanced market, although conditions vary by region and price range.

Limited supply can keep prices firm even when sales are slow. Many homeowners who secured lower mortgage rates during the pandemic may be reluctant to sell and replace those loans with new mortgages at today’s higher rates. That lock-in effect can restrict resale listings, although inventory and affordability differ substantially across the country.

First-time buyers face the toughest entry point

First-time buyers accounted for 29% of July sales, down from 33% in June and below the historical norm of about 40%. Households without existing home equity are more exposed to the combined effect of down-payment requirements, high prices and monthly borrowing costs.

NAR reported that July sales increased in the Northeast, held steady in the West and declined in the Midwest and South. Those regional figures do not erase the national affordability problem, but they show why local market conditions can differ by price tier, inventory and income.

What to watch next

The next signals will include weekly mortgage-rate readings, pending-home-sales data and changes in available inventory. NAR has scheduled its August existing-home-sales release for Sept. 10, 2026.

For buyers, a modest rate movement may not be enough to change the payment calculation. For sellers, the decision remains tied not only to a home’s value but also to the cost of replacing an older, lower-rate mortgage.

Sources

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