U.S. existing home sales fall for second straight month in July

Sales of existing homes in the United States fell for a second consecutive month in July, reflecting persistent headwinds from high borrowing costs and limited supply.

The National Association of Realtors reported on Tuesday that existing home sales, which account for the majority of U.S. housing transactions, dropped 2.2% from June to a seasonally adjusted annual rate of 4.07 million units. The decline follows a 5.4% decrease in June and underscores the ongoing challenges facing prospective buyers.

The median existing-home price rose 4.2% from a year earlier to $422,600 in July, marking the highest July price on record. Despite the price increase, the number of homes available for sale remained tight, with inventory at 1.33 million units, up 2.6% from June but still 9.0% lower than July 2023.

Mortgage rates have remained elevated in recent months, with the average 30-year fixed mortgage rate hovering near 7%, according to Freddie Mac data. The combination of high prices and borrowing costs has constrained affordability, particularly for first-time buyers.

Lawrence Yun, chief economist at the NAR, noted that the market is experiencing a "two-tiered" dynamic, where higher-priced homes are moving more slowly while lower-priced properties face stronger demand amid limited supply. He added that the Federal Reserve’s policy path could influence mortgage rates and buyer sentiment in the coming months.

The report also highlighted regional disparities, with sales declining in the Northeast, Midwest, and South, while the West saw a modest increase. The West’s gain was attributed to a slight improvement in inventory levels in markets such as California and Washington.

The decline in existing home sales aligns with broader trends in the U.S. housing market, where elevated mortgage rates have weighed on activity despite steady demand from buyers with strong credit profiles.