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EXISTING HOME SALES EDGE UP IN JULY BUT REMAIN SLUGGISH Sales of previously owned homes saw a slight increase in July, but overall activity remained subdued as many potential buyers stayed on the sidelines due to high mortgage rates.
The National Association of Realtors® reported that total existing-home sales rose by 1.3% from June, reaching a seasonally adjusted annual rate of 3.95 million in July. However, this figure marked a 2.5% decline compared to a year ago and represented the slowest July sales pace since 2010. The median sales price for existing homes hit $422,600 in July, up 4.2% from the previous year and the highest price on record for the month. Price increases were observed across all four U.S. regions on an annual basis. “Despite the modest gain, home sales are still sluggish,” said NAR Chief Economist Lawrence Yun. “But consumers are definitely seeing more choices, and affordability is improving as mortgage rates have eased slightly.” Although rates have moderated, they remain significantly higher than in previous years, continuing to influence buyer behavior. LIMITED SUPPLY KEEPS HOME PRICES ELEVATED The slight drop in median home prices from June’s all-time high followed typical seasonal patterns. However, July's median price of $422,600 was still well above last year’s figures, marking the 13th consecutive month of year-over-year price gains. Yun noted that ongoing supply constraints are contributing to rising prices, even as the number of home sales remains near historic lows. The inventory of homes for sale at the end of July stood at 1.33 million units, equating to a four-month supply at the current sales pace. While this is a 20% increase from a year ago, it remains below the six-month supply level considered indicative of a balanced market. “This is a transitional period where inventory is trying to normalize but hasn’t yet fully recovered from the disruptions caused by the COVID-19 pandemic,” Yun explained. An unusual consequence of the current market conditions is that newly built homes are now often cheaper than existing homes - a reversal of longstanding trends. During the second quarter of this year, the median price of a new home was $412,300, which is 2.3% less than the $422,100 median price for an existing home, according to the National Association of Home Builders. “With the nation facing a housing affordability crisis, increasing the supply of attainable housing is the key to easing cost burdens for American families,” said NAHB Chairman Carl Harris.
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