US Home Sales Slip Again as Prices Stay High; Small Business Mood Brightens

US existing home sales declined for a second consecutive month in July, as elevated mortgage rates and persistent price pressures kept potential buyers on the sidelines. Sales dropped 1.7% to a seasonally adjusted annual rate of 4.06 million units, according to the National Association of Realtors. The pace has now remained below 5 million units for four years.

The median existing home price rose 2% from a year earlier to $434,100. Inventory of previously owned homes fell 1.9% to 1.54 million units, down 0.6% from a year ago. At the current sales pace, it would take 4.6 months to exhaust available inventory, unchanged from the prior month.

Mortgage rates have climbed since the Middle East conflict began, with the average 30-year fixed-rate mortgage reaching 6.69% last week — the highest level since July 2025. Many homeowners holding ultra-low COVID-era mortgage rates are reluctant to sell, worsening the supply shortage.

Sales were mixed regionally, falling in the Midwest and South, rising in the Northeast, and holding steady in the West. Homes priced under $250,000 saw the weakest demand due to a scarcity of starter homes, while properties above $750,000 continued to see double-digit growth — a sign of a K-shaped recovery favoring higher-income buyers.

First-time buyers accounted for 29% of sales, down from 33% in June. The median time on market edged up to 29 days. Distressed sales, including foreclosures, remained unchanged at 2%.

Separately, small business sentiment rose to an 11-month high in July. The National Federation of Independent Business reported its Small Business Optimism Index jumped 2.4 points to 99.8, surpassing its 52-year average. The share of owners planning to create new jobs over the next three months surged 9 points to 20%, the highest since October 2022.

The improved hiring plans come after a surprise drop in nonfarm payrolls in July, which some economists attributed to worker shortages. The labor force has shrunk by over a million this year due to retirements and stricter immigration enforcement. Owners across construction and agriculture reported difficulty finding both skilled and unskilled workers, with many saying qualified applicants are increasingly scarce.