Recent decline in mortgage rates helps boost activity, but it remains stuck at low levels
U.S. home sales rose slightly in July, ending a four-month streak of declines, and prices remained near record highs at a time when the cost of housing has become a hot-button election issue.
The combination of elevated mortgage rates and high prices has made home-buying unaffordable to millions of Americans and pushed many buyers out of the market.
Mortgage rates have fallen in recent weeks, which helped boost sales modestly in July. But the volume of existing-home sales has been stuck at low levels all year, and the spring selling season, usually the busiest time of year for the housing market, was a flop.
Lisa Ciccotelli of Berkshire Hathaway in Haverford, Lower Merion says “Local Real Estate statistics can often be different than National. Locally on the Main Line and the Greater Philadelphia area, the low inventory of houses created a depressed Spring Market because with no homes to sell, sales totals are down. It is a highly competitive buyer’s market, and a very desirable seller’s market on the Main Line and surrounding suburbs.”
Sales of previously owned homes in July rose 1.3% from the prior month to a seasonally adjusted annual rate of 3.95 million, the National Association of Realtors said Thursday. That was the lowest level for any July since 2010. On an annual basis, existing-home sales, which make up most of the housing market, fell 2.5%.
“Home sales are rising minimally,” said Lawrence Yun, NAR’s chief economist. “We do have more inventory, but people are not picking up on that.”
Americans have repeatedly cited the high cost of housing as a top concern, and both parties have proposed plans to address it. Democratic presidential candidate Kamala Harris last week unveiled a plan to add three million more homes, while the Republican Party has proposed opening up more federal land for building.
The July data doesn’t show whether the new rules for how real-estate agents get paid have had an effect on the market, because the rule changes were implemented in most of the U.S. this month.
Mortgage rates fell earlier this month to their lowest level since May 2023, helping improve affordability for home buyers. An increase in the number of homes for sale has also made it easier for some house hunters to find homes to buy.
At the current sales pace, there was a 4.0-month supply of homes on the market at the end of July. That is at the low end of what is considered a balanced market between buyers and sellers.
Ethan and Kylee Armstrong lost out on their first offer to buy a home this spring in Kansas City, Mo., to a competing bid. “It stung a little bit,” Ethan Armstrong said.
A month later, when they put in their third offer on a house, there weren’t other buyers bidding against them. They bought the house in July for $272,500.
“It seems like the entire market has kind of settled down recently,” he said. “A lot of homes are sitting.”
Even with lower rates and higher inventory, buyers remain hesitant, real-estate agents said. Some are waiting for rates to fall further, and others think houses are overpriced.
“Buyers have a lot more choices,” said Christian Ross, a real-estate agent in Atlanta. But “the reality is, we’re still sitting in high prices.”
Kelly Laudadio bought a three-bedroom house in Houston in July for $520,000. She said there were few options within her budget that met her needs.
“It’s amazing what people are selling for half a million dollars right now—or are trying to sell, I should say,” she said. “This house was a unicorn.”
The typical home sold in July was on the market for 24 days, up from 20 days a year earlier, NAR said.
News Corp, owner of the Journal, also operates Realtor.com under license from NAR.
