WASHINGTON — Sales of existing homes fell in July as high mortgage rates and soaring home prices continued to weigh on the U.S. housing market.
Existing-home sales fell 1.7% from June to a seasonally adjusted annual rate of 4.06 million units, the National Association of Realtors said Tuesday. The figure was a notch higher than the rate of 4.05 million economists surveyed by FactSet had forecast. Sales were still up 0.7 per cent on the year before.
The median U.S. home price gained 2% from July 2025 to $434,100. The median price in June of $442,800 was the highest on record for any month in NAR’s data series going back to 1999. Home prices are higher than a year ago for 37 straight months.
Mortgage costs have been a big obstacle for buyers. Freddie Mac’s weekly survey put the 30-year fixed mortgage rate at 6.55% on July 16, up from 6.53% a week earlier. Before publication, we need to confirm the 6.69% number referenced in the source with the relevant Freddie Mac release from late July.
Higher borrowing costs have helped prolong the housing slowdown. Activity has been around a 4 million annual pace for about three years, below the longer-term average of about 5.2 million cited by these.
Also, supply is constrained, which limits the market. That’s down 1.9% from June and 0.6% from a year earlier. NAR had 1.54 million homes for sale at the end of July. This was a supply of 4.6 months at the current sales rate, down from the 5 to 6 months that are normally associated with a more balanced market.
Some homeowners are reluctant to sell because they have mortgages they took out at much cheaper borrowing costs during the pandemic. Housing economists say so-called mortgage-rate lock-in has limited the number of homes coming onto the market.
Low inventories and homeowners’ reluctance to give up low-rate mortgages are constraining both buying and selling activity, said Carl Weinberg, chief economist at High Frequency Economics.
There remain wide regional disparities. In the Northeast, home prices climbed 5.2% in July from a year earlier, the biggest increase of the four major U.S. regions, as limited inventory continued to support values.
First-time buyers accounted for 29% of sales in July, down from 33% in June but up slightly from 28% a year ago. The NAR has historically pegged the first-time buyer share at about 40%, reflecting the affordability challenges for people entering the market.
The recent weakness in the housing market stems from the sharp rise in mortgage rates that began in 2022. Of late, inflation worries linked to higher energy prices have also been weighing on bond yields, which affect mortgage rates.
For buyers and sellers, July data indicate a market that still has elevated prices while borrowing costs and tight inventory continue to constrain activity.
