US existing homes fall 1.7% in July as record prices, high mortgage rates stifle would be-buyers

U.S. home sales declined by 1.7% in July amid soaring prices and record-high mortgage rates, according to the National Association of Realtors (NAR). The seasonally adjusted annual rate of existing home sales dropped to 4.06 million units, slightly above the 4.05 million economists predicted. Despite the decline, July sales were up 0.7% compared to last year.

The median home price reached an all-time high of $434,100 for July, marking a 2% increase from the previous year. However, mortgage buyer Freddie Mac reported that the 30-year fixed rate mortgage climbed to 6.69%, its highest level in nearly a year, fueled by expectations of higher inflation due to surging oil prices. This was the fifth consecutive week the average rate increased.

Lawrence Yun, NAR's chief economist, noted that home sales have remained remarkably stable despite the rising mortgage rate environment. He suggested that if average mortgage rates returned closer to 6%, the housing market would be thriving.

The NAR data revealed that 29% of sales were first-time homebuyers, a slight increase from June but still far below the historical average of closer to 40%. There were 1.54 million unsold homes at the end of July, with only a 4.6-month supply at the current sales pace – well below the typical 5- to 6-month supply that signifies a balanced market.