US Existing Home Sales Dip Again in July as Prices Hit Record High
US existing home sales fell 1.7% in July to a 4.06 million annual pace, as record prices and higher mortgage rates deterred buyers.
Sales of previously owned homes in the United States declined for another month in July, as prospective buyers continued to grapple with record-high prices and the most expensive mortgages in over a year.
The National Association of Realtors reported that existing home sales slipped 1.7% from June to a seasonally adjusted annual rate of 4.06 million units. While the pace was slightly better than the 4.05 million that economists had forecast, it remains well below the historical average of around 5.2 million units.
Despite the slowdown in transactions, the median sales price for a home rose 2% from a year ago to $434,100, setting a new record for the month of July.
The affordability squeeze has been exacerbated by a steady climb in borrowing costs. Freddie Mac reported last week that the average rate on a 30-year fixed-rate mortgage had risen to 6.69%, its highest level in just over a year. This marked the fifth consecutive weekly increase, adding further strain for buyers already facing steep monthly payments.
Lawrence Yun, chief economist at the National Association of Realtors, noted that sales have remained remarkably stable despite the rising rate environment. He suggested that the market would be thriving if average mortgage rates were to return to near 6%.
The housing market has been in a prolonged slump since 2022, when mortgage rates began their ascent from pandemic-era lows. Sales of existing homes were essentially flat last year, stuck at a 30-year low.
Inventory levels also remain a concern. At the end of July, there were 1.54 million unsold homes on the market, a 1.9% decline from June and 0.6% lower than a year ago. This supply translates to a 4.6-month cushion at the current sales pace, which is below the 5- to 6-month supply typically considered a balanced market.
Regionally, the Northeast saw the sharpest price appreciation, with median prices jumping 5.2% year-over-year, driven by a shortage of available homes.
First-time buyers accounted for 29% of all sales in July, down from 33% in June but slightly above the 28% recorded in July of the previous year. Historically, this group has made up closer to 40% of home sales.