Mortgage rates hit one-year high at 6.69% as home sales fall

U.S. home sales slowed in July as skyrocketing prices and record-high mortgage rates of 6.69% presented significant challenges for potential buyers, according to the National Association of Realtors (NAR). Existing home sales declined 1.7% from June to a seasonally adjusted annual rate of 4.06 million units, slightly above the 4.05 million pace anticipated by economists, reported FactSet.

However, July sales marked a 0.7% increase compared to the previous year. Home prices continued to soar, reaching record levels for July, with the median sales price rising 2% from a year earlier to $434,100. The U.S. median sales price hit $442,800 in June, an all-time high for any month since 1999. Mortgage buyer Freddie Mac noted that the benchmark 30-year fixed-rate mortgage rate rose to 6.69%, its highest level in over a year, marking five consecutive weeks of increases.

Carl Weinberg, chief economist at High Frequency Economics, stated that the data provides few positives for the U.S. housing market, as existing homeowners cannot afford to sell and those with low COVID-era mortgages cannot afford to let them go. The current inventory of homes for sale remains low, with just 1.54 million unsold homes, significantly below the typical 2 million homes before the COVID-19 pandemic.

Home inventories at month-end stood at 4.6 months of supply, well below the traditional 5- to 6-month balance between buyers and sellers. Prices in the Northeast were climbing faster than the rest of the country, with a 5.2% year-over-year increase due to a shortage of inventory. First-time homebuyers accounted for 29% of sales, down from 33% in June but slightly higher than the 28% in July 2025, highlighting a departure from the historical norm of around 40% first-time buyers.