Sales of previously occupied U.S. homes declined for a second consecutive month in July, as record-high prices and the steepest mortgage rates in a year continued to sideline prospective buyers.
Existing home sales fell 1.7% from June to a seasonally adjusted annual rate of 4.06 million units, the National Association of Realtors reported Tuesday. The figure came in slightly above the 4.05 million pace economists had forecast, and sales were up 0.7% compared with the same month a year earlier.
Home prices, meanwhile, pushed to fresh heights. The national median sales price rose 2% from a year earlier to $434,100, an unprecedented level for the month of July.
Borrowing costs have compounded the affordability squeeze. The benchmark 30-year fixed mortgage rate climbed to 6.69% last week, its highest point in just over a year and the fifth straight week of increases, according to figures from mortgage buyer Freddie Mac.
“Home sales have been remarkably stable, even amid the rising mortgage rate environment of the past few months,” said Lawrence Yun, the association’s chief economist. “There’s no doubt that the housing market would be thriving if average mortgage rates were to return near 6%.”
Sales have hovered close to a 4-million annual pace for roughly three years, well below the historic norm of about 5.2 million. The market has remained in a prolonged slump since 2022, when mortgage rates began climbing from pandemic-era lows.
The persistent weakness echoes trends seen throughout the past year, with earlier declines recorded when high rates dampened activity during the traditional spring buying season. Sales were essentially flat last year, stuck at a 30-year low.
The combination of elevated prices and expensive financing has kept many would-be buyers on the sidelines, while limited inventory has done little to ease upward pressure on prices.
Analysts suggest that a meaningful recovery hinges on a sustained easing of mortgage rates, which would improve affordability and draw hesitant buyers back into the market. For now, the housing sector appears likely to remain subdued as borrowing costs stay elevated.