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July Existing Home Sales Fall 2.2%

Existing home sales fell more than estimated in July, dropping by 2.2% to 4.07 million at an annualized rate, according to a report released Tuesday.

Key Takeaways

  • July existing home sales fell 2.2%, to 4.07 million at an annualized rate.
  • Federal Reserve rate hikes have pushed mortgage rates up to a 21-year high, making buying a home about 38% more expensive than last year at this time.
  • Homeowners with low mortgage rates are staying put to avoid paying more than 7% on a new mortgage.
  • Existing homebuyers’ reluctance to sell means the market is undersupplied and that is driving home prices higher.

Economists had expected home sales to fall less than 1% month-over-month to 4.15 million, according to the National Association of Realtors (NAR) monthly report. Year-over-year, home sales are down 16.6%.

“Two factors are driving sales activity—inventory availability and mortgage rates,” NAR Chief Economist Lawrence Yun said in a statement. “Unfortunately, both have been unfavorable to buyers.”

Total housing inventory did increase over the month to 1.11 million units, up 3.7% month on month but down 14.6% year-over-year. Current inventory levels indicate a 3.3-month supply of homes, up from 3.1% in June 2023.

The median home price for existing homes, including condo units, was $406,700, up 1.9% from July 2022. Prices rose in three of the four regions as delineated by NAR: the Northeast, South, and Midwest. Prices were unchanged in the Western region.