• Existing home sales fell 1.7% in July to a seasonally adjusted annual rate of 4.06 million, narrowly beating the 4.05 million consensus.
  • The median existing-home price rose 2% year-over-year to $434,100, indicating persistent affordability challenges.
  • Inventory ticked up to 1.54 million units, or 4.6 months of supply, offering a glimmer of relief for buyers.

A Cooling Market, Yet Prices Hold Firm

U.S. existing home sales lost momentum in July, dropping 1.7% to a seasonally adjusted annual rate of 4.06 million, according to data from the National Association of Realtors. The figure came in just above the 4.05 million that economists had penciled in, but the overall trend remains subdued as higher mortgage rates and affordability constraints continue to weigh on buyers.

Despite the slowdown in transactions, prices are not budging. The median existing-home price climbed 2% from a year ago to $434,100, underscoring a market where demand is cooling but supply remains tight enough to keep price tags elevated. Inventory reached 1.54 million units, representing 4.6 months of supply at the current sales pace—a modest improvement from earlier in the year but still below the six-month level generally considered balanced.

“Buyers are being more selective, but they’re not seeing much relief on price,” said one industry analyst, who asked not to be named. “Sellers who are pricing realistically are still finding takers, but the days of multiple offers are fading.”

Affordability Pressures Persist

The July figures reflect a market still grappling with the fallout of elevated borrowing costs. Mortgage rates have eased slightly from their peaks but remain well above levels seen two years ago, squeezing budgets and sidelining many first-time buyers. The uptick in inventory, while welcome, hasn't been enough to offset these headwinds.

“We’re seeing a market that’s adjusting to a new normal,” said a housing economist at a major bank. “Sales are running at a pace that’s more consistent with higher rates, but the lack of supply is keeping a floor under prices.”

What’s Next?

Looking ahead, much will depend on the trajectory of mortgage rates. If rates stabilize or drift lower, and inventory continues to build gradually, the housing market could see a slow but steady recovery in sales activity. However, without such relief, the recent slide in transactions may persist into the fall.

For now, the market is in a holding pattern. “We’re not seeing a crash, nor are we seeing a boom,” the analyst added. “It’s a market that’s finding its footing.”