U.S. Existing-Home Sales Fall 1.7% in July as Median Price Reaches $434,100

U.S. existing-home sales fell 1.7% in July to a seasonally adjusted annual rate of 4.06 million, extending a weak summer for the housing market even as affordability improved from a year earlier. Sales were still 0.7% higher than in July 2025, according to the National Association of Realtors, but the monthly decline followed a 2.4% drop in June.

Home prices continued to rise on an annual basis. The median existing-home price was $434,100 in July, up 2.0% from $425,700 a year earlier and marking the 37th consecutive month of year-over-year price increases. That combination, softer sales but still-rising prices, shows how limited supply and elevated borrowing costs are keeping the market from returning to a stronger transaction pace.

The July Existing-Home Sales report also showed a modest improvement in affordability compared with last year. NAR’s Housing Affordability Index rose to 103.3 from 98.3 in July 2025, and affordability improved year over year in all four major U.S. regions.

Affordability improved from last year, but mortgage costs remain restrictive

NAR’s affordability measure is designed to show whether a family earning the median income has enough income to qualify for a mortgage on a median-priced home under the association’s assumptions. A reading of 100 means the median-income family has exactly the income required to qualify. July’s reading of 103.3 therefore indicates some improvement in the relationship between incomes, prices and borrowing costs compared with the sub-100 reading a year earlier.

The improvement does not mean housing has suddenly become inexpensive. Mortgage rates remain well above the levels that prevailed before the sharp tightening in financial conditions earlier this decade, and prices are still rising. NAR reported that the average 30-year fixed mortgage rate was 6.54% in July, up from 6.49% in June but below 6.72% in July 2025.

Weekly data from Freddie Mac’s Primary Mortgage Market Survey show how rates moved higher as July progressed. The average 30-year fixed rate rose from 6.49% on July 9 to 6.58% on July 23 and 6.66% on July 30. It reached 6.69% on August 6. That late-month rise helps explain why an improvement in year-over-year affordability can coexist with weak current sales activity.

NAR Chief Economist Lawrence Yun said home sales had remained relatively stable despite the recent rise in mortgage rates, while noting that year-to-date sales were up 2.4%. His view that the market would be stronger with mortgage rates closer to 6% underscores how sensitive demand remains to relatively small changes in financing costs.

The buyer mix also shows continued pressure on households that depend most heavily on mortgage financing. First-time buyers accounted for 29% of July sales, down from 33% in June, although slightly above 28% a year earlier. Cash purchases represented 26% of transactions, up from 25% in June but down from 31% a year ago. The figures do not prove that higher rates alone caused the shift, but they are consistent with a market in which buyers with less financing exposure can have more flexibility.

Inventory remains too tight to produce broad price relief

Total housing inventory fell 1.9% from June to 1.54 million units and was 0.6% below its level a year earlier. The supply of unsold homes remained at 4.6 months, unchanged both from June and from July 2025. That is enough inventory to give buyers somewhat more choice than in the most supply-constrained periods of recent years, but it has not been sufficient to push national prices lower on a year-over-year basis.

The persistence of price gains despite slower transaction volume is a central feature of the current market. Existing-home sales have struggled to regain momentum because many potential buyers face high monthly payments, while many owners who refinanced or purchased homes at lower mortgage rates have less incentive to move. Limited resale inventory can support prices even when demand is not especially strong.

Single-family sales fell 1.9% in July to a 3.69 million annual rate, though they were 0.8% higher than a year earlier. The median single-family home price rose 1.9% from a year earlier to $440,300. Condominium and co-op sales were unchanged from June at a 370,000 annual rate, while their median price increased 2.2% from a year earlier to $371,800.

Homes also took slightly longer to sell. The median time on market was 29 days in July, up from 28 days in June and from 28 days a year earlier. The change is small, but together with weaker monthly sales and lower inventory it suggests a market that is moving slowly rather than one experiencing a broad surge in either demand or supply.

Regional data show a housing market moving at different speeds

The Northeast was the only major region to post a monthly sales increase in July, rising 2.0% to a 500,000 annual rate. Sales were unchanged from a year earlier, while the regional median price climbed 5.2% to $563,800, the strongest annual price increase among the four regions.

In the Midwest, sales fell 2.0% from June to a 970,000 annual rate but were 2.1% higher than a year earlier. The median price rose 2.8% to $342,900. NAR’s affordability measure improved 4.0% from a year earlier in the region, and Yun noted that some smaller Midwestern markets remain substantially more accessible to households with moderate incomes than higher-priced coastal areas.

The South recorded the largest monthly sales decline, falling 3.1% to a 1.86 million annual rate. Sales were unchanged from a year earlier, while the median price increased 0.9% to $371,700. The West was flat month over month at a 730,000 annual rate and up 1.4% from a year earlier. Its median price was $622,200, up just 0.2% year over year.

Affordability improved from a year earlier in every region, with NAR reporting gains of 1.5% in the Northeast, 4.0% in the Midwest, 6.1% in the South and 7.3% in the West. Even so, the sales figures show that better year-over-year affordability has not yet translated into a broad rebound in transactions.

The next near-term signal will come from NAR’s July Pending Home Sales Index, scheduled for August 18. Because pending sales track signed contracts and generally lead closed existing-home sales, that report will offer an early indication of whether the late-July rise in mortgage rates produced additional weakness. NAR is scheduled to release August existing-home sales on September 10.