Existing home sales continued to slow in July as record-high home prices and elevated mortgage rates weighed on buyers. Mortgage rates resumed an upward trend after the ceasefire ended in early July. Heightened geopolitical uncertainty and an increasingly hawkish stance from the Fed pushed rates to nearly 6.7% last week, the highest level since July 2025. Recent monthly volatility reflects home buyer sensitivity to mortgage rate changes, suggesting the market would respond quickly if rates returned to near 6%.
Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 1.7% to a seasonally adjusted annual rate of 4.06 million in July, according to the National Association of Realtors (NAR). On a year-over-year basis, sales were 0.7% higher than a year ago.
The existing home inventory level was 1.54 million units in July, down 1.9% from June and down 0.6% from a year ago. At the current sales rate, July unsold inventory sits at a 4.6-months’ supply, unchanged from last month and a year ago. Inventory between 4.5 to 6 months’ supply is generally considered a balanced market.
Homes stayed on the market for a median of 29 days in July, up from 28 days in the previous month and July 2025.
The first-time buyer share was 29% in July. The share was down from 33% in June but up from 28% a year ago.
The July all-cash sales share was 26% of transactions, up from 25% last month but down from 31% in July 2025. All-cash buyers are less affected by changes in interest rates.
The July median sales price of all existing homes was $434,100, up 2.0% from last year. This marks the 37th consecutive month of year-over-year increases. The median condominium/co-op price in July was up 2.2% from a year ago at $371,800. Recent gains for home inventory will put downward pressure on resale home prices in most markets in 2026.
Existing home sales in July were mixed across the four major regions. Sales fell in the South (-3.1%) and Midwest (-2.0%) but rose in the Northeast (+2.0%). Sales in the West were unchanged in July. On a year-over-year basis, sales increased in the Midwest (+2.1%) and West (+1.4%) but remained unchanged in the Northeast and the South.
The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose from 76.6 to 72.5 in June, the lowest reading since January 2026. On a year-over-year basis, pending sales were 0.3% lower than a year ago, according to the National Association of Realtors’ data.
