July existing-home sales rose 2% from June to 4.01 million units on a seasonally adjusted annualized basis, according to the National Association of Realtors (NAR). This uptick came as housing analysts had anticipated a modest decline rather than an increase, underscoring a market that continues to oscillate between supply constraints and evolving demand. On a year-over-year basis, sales were 0.8% higher than July 2024, signaling some persistence in demand despite higher borrowing costs. The month’s sales totals reflect closings, not contracts, highlighting the lag between purchaser commitments and actual closings in a period when mortgage rates were shifting.
The July sales data also illuminate how mortgage rate movements influence housing activity. Contacts indicated that closings likely reflected activity signed in May and June, when the average rate on the 30-year fixed mortgage was trending downward from a high point earlier in the year. Mortgage News Daily reported that rates briefly rose above 7% in May before easing to 6.67% by the end of June. This rate pattern helps explain the timing of closings and underscores how rate volatility can modulate buyer urgency and lender backlogs. The July figure thus sits within a broader narrative of rate volatility, buyer repricing, and the gradual reallocation of demand across price bands, property types, and regions.
This introductory snapshot sets the stage for a deeper look at supply dynamics, price movements, and shifts in who is buying property, where, and at what price points. The July environment features a notable expansion in for-sale inventory, a stabilizing yet still elevated price landscape, and a mix of buyers ranging from high-end purchasers to cash buyers and investors. The next sections unpack those elements in detail, revealing how the market balanced inventory against demand and what that means for buyers, sellers, investors, and the broader housing economy.
Inventory and supply dynamics
At the end of July, 1.55 million homes were listed for sale, representing a 15.7% year-over-year increase. This growth in inventory occurs against a backdrop of a market still working through supply constraints that have characterized the housing landscape for years, yet it marks a meaningful step toward greater selection for buyers. With the current pace of sales, the supply translates to about a 4.6-month inventory, a metric that indicates how long it would take to deplete all listed homes at the prevailing sales rate. A six-month supply is commonly cited as a balanced territory between buyers and sellers, suggesting that current conditions tilt slightly in favor of buyers relative to a seller’s market, though the balance is nuanced by location, price tier, and mortgage-rate expectations.
Historically, inventory now sits at its highest level since May 2020, during the early stages of the pandemic, but remains well below the pre-COVID era’s supply levels. The juxtaposition of higher inventory with ongoing price pressures helps explain why price gains have cooled relative to the frantic pace of a few years ago, even as some price appreciation persists on an annual basis. The inventory uptick is a critical piece of the market puzzle, offering buyers more choices and potentially easing competition in some neighborhoods and price bands. For sellers, it signals more competition, particularly among homes priced at entry- to mid-market levels.
The inventory dynamics also interact with regional and segment-specific trends. As more homes come onto the market, buyers can pivot to properties that better match their timing, budget, and preferences. Yet the overall supply remains constrained by factors such as construction timelines in new homes, the lingering effects of previous affordability pressures, and the ongoing recalibration of demand patterns as mortgage rates fluctuated through the year. The net effect is a housing market that benefits from greater choice but remains sensitive to the cost of money and the pace at which sellers adjust expectations.
In sum, July’s inventory expansion provided a crucial counterweight to demand, helping to relieve some bidding competition and allowing buyers to compare options more comprehensively. The 4.6-month supply figure, while not a full return to balance, points to a market inching toward equilibrium in certain segments, even as it remains off-balance in others. The balance of supply and demand continues to be a defining feature of price behavior, days-on-market trends, and the pace at which buyers can secure properties at acceptable terms.
Pricing and affordability trends
The median price of an existing home sold in July was $422,400, up by 0.2% from July of the previous year and marking a record high price for the month of July. This result underscores a persistent pattern: prices have trended higher on an annual basis for 25 consecutive months, even as the rate of growth has moderated in the near term. The persistence of year-over-year price gains in a landscape of rising inventory signals that while buyers have more options, the cost of homes remains elevated relative to historical norms. The market could be approaching an inflection point, where affordability and selection intersect to influence buyer behavior and price trajectory.
Lawrence Yun, the National Association of Realtors’ chief economist, framed the affordability dynamic as a key driver behind the observed sales activity. He noted that “the ever-so-slight improvement in housing affordability is inching up home sales,” emphasizing that wage growth is now comfortably outpacing home price growth. This suggests that households’ incomes are beginning to catch up with prices enough to sustain demand, particularly among buyers who are entering the market with mortgage financing. The affordability improvement is linked to both modest rate declines and ongoing wage gains, which together help buyers qualify for loans and service debt at more favorable terms than in periods of sharp rate increases.
Beyond the headline price, regional nuances appear in the data. Notably, condominium sales increased in the South, a region where condo price dynamics have diverged from higher-priced single-family homes over the past year as prices faced pressure in other areas. This shift points to a broader reallocation of demand across property types and regions, reflecting buyers’ evolving preferences as they navigate affordability and inventory constraints. The price momentum in high-end segments remains pronounced, while lower-priced tiers have shown more sensitivity to rate changes and supply conditions.
Taken together, the July pricing picture suggests a market that remains price-rich on a year-over-year basis but potentially softer in pace as affordability improves and supply broadens. The record July price level for the median signals ongoing demand concentration around desirable properties, even as the improvement in affordability provides some relief to buyers. As Yun has suggested, the balance between wage growth and price growth is a central factor shaping buyer sentiment and the likelihood of continued price resilience amid a gradually improving affordability backdrop.
Market segments, price bands, and regional signals
Market activity in July displayed clear segmentation among price bands and property types. Sales of homes priced over $1 million rose 7.1% year over year, illustrating sustained demand in the upper end of the market even as overall affordability pressures persist. In contrast, sales of homes priced between $100,000 and $250,000 declined 0.1% year over year, signaling relative softness in the lower-middle tranche of the market. Homes priced below $100,000 also faced a decline, dropping 8% year over year. This divergence highlights how buyers at different price points respond differently to changes in mortgage rates, inventory availability, and wage growth dynamics.
Condominium activity in the South stands out as a notable regional shift within the July data. While the article notes that condo sales rose in that region, it does not provide explicit figures beyond this regional observation. The South’s condominium market, with its typically more affordable entry points relative to single-family homes in other regions, can serve as a barometer for demand among first-time buyers and price-conscious buyers who are seeking lower-cost entry into homeownership. The regional signal aligns with the broader narrative of buyers reallocating demand toward areas and product types that offer more attractive price-to-value propositions, particularly in markets where price levels have softened or stabilized after a period of rapid appreciation.
The regional and price-band dynamics feed into a broader interpretation: while the high end remains robust with elevated price points and strong turnover in luxury segments, the lower end and mid-range bands show more sensitivity to interest-rate shifts and inventory movements. For buyers, this means that opportunities may appear in mid-tier listings or in markets where perceived value aligns with evolving affordability. For sellers, understanding where demand is strongest helps determine pricing strategy, listing timing, and how to position properties in a shifting demand landscape.
In sum, the July data reveal a market differentiated by price tier, property type, and regional behavior, with luxury segments showing resilience, lower-price bands showing varying degrees of softness, and the South’s condo market offering an observable regional shift. The persistence of higher-than-average price levels paired with improving affordability signals a market that remains selective and nuanced, rather than uniformly buoyant or recessionary.
Buyer composition: first-time buyers, investors, and cash buyers
The composition of buyers in July offers important clues about demand sources and underlying affordability constraints. First-time buyers accounted for 28% of sales in July, down from 30% in June and down from 29% in July 2024. This indicates a modest pullback in first-time buyer participation despite improving affordability, suggesting that entry into homeownership remains constrained for some lower- and middle-income buyers, possibly due to higher down payments, limited inventory in affordable segments, or competition from other buyer groups with greater financial resources.
Investors represented 20% of all transactions in July, up from 13% in July 2024. This upward shift in investor activity could be driven by the increase in supply and the attractiveness of certain price bands or regional markets where rental demand supports investment returns. The rise in investor share interacts with affordability dynamics and the supply mix, potentially influencing pricing strategies and time-on-market for investment-oriented properties.
In addition to the investor share, cash buyers accounted for 31% of transactions, up from 27% in the previous year. The increase in all-cash purchases is notable and described by Yun as unusually high. He suggested that stock market wealth or housing wealth could be contributing factors to the elevated cash-buying activity. When buyers rely on cash, competition can intensify in select segments, particularly in a market with constrained inventory and rising prices. The higher rate environment often pushes buyers toward securing financing through cash transactions to expedite closings and avoid lock-in risk.
The combination of these shifts—lower share for first-time buyers, stronger investor participation, and elevated cash-only activity—paints a market where a portion of demand is capitalized by buyers with greater liquidity, while traditional first-time buyers may face constraints. The implications for price dynamics are nuanced. Cash and investor demand can support price resilience in desirable neighborhoods, particularly those with limited supply of entry-level homes, while first-time buyers may be more sensitive to rate fluctuations and down-payment requirements.
Lawrence Yun’s commentary underscores the relevance of affordability in shaping buyer behavior. With wage growth outpacing home price growth and a modest improvement in affordability, buyers have more capacity to qualify for loans and to consider a broader set of options. Yet the data also show a durable preference among higher-end buyers and a continued presence of investor and cash buyers who can navigate the market under various financing conditions. Understanding these dynamics is essential for stakeholders across the housing sector—from lenders and real estate agents to policymakers and investors.
Mortgage-rate context and its transmission to activity
The rate backdrop is a crucial explanatory variable for July’s housing activity. The mortgage-rate trajectory in late spring and early summer—briefly exceeding 7% in May and ending June at about 6.67%—helped shape the timing and intensity of closings. Mortgages at these levels affect payment calculations, debt-service costs, and debt-to-income considerations for qualified buyers, particularly first-timers and mid-market buyers. The decline from the May peak toward the June close likely aided buyers who had paused or delayed decisions in the prior months, enabling them to accelerate closings when rates retreated.
The broader takeaway is that mortgage-rate movements exert a powerful influence on housing velocity, including the pace at which contracts move to closings, the willingness of sellers to list at certain prices, and the balance of power between buyers and sellers. When rates ease temporarily, as they did before July, buyers may re-enter the market with refreshed confidence, while sellers may adjust expectations as prospective buyers regain affordability margins. Conversely, a renewed uptick in rates can re-tighten affordability constraints and reduce bidding competition, particularly for homes at the higher end of the price spectrum.
In this context, the July data suggest that rate dynamics, in combination with rising inventory, contributed to a softer time-to-close environment relative to the months of peak rate volatility. The observed 28 days on market in July—up from 24 days in the previous year—reflect a market in which buyers take a bit longer to evaluate options and negotiate terms in a higher-rate environment. The rate backdrop also interacts with the cash-buying surge, as buyers who can pay with cash may bypass some financing frictions, allowing quicker closings and reducing the sensitivity to rate movements for those transactions.
Overall, the mortgage-rate story remains central to interpreting July’s housing data. The rate path helped shape the timing of closings and influenced buyer strategy across segments, including first-time buyers, investors, and cash buyers. As rates move, the balance of affordability, demand, and inventory will continue to evolve, with implications for price trajectories, market velocity, and the mix of buyers in the months ahead.
Market velocity, time on market, and buyer takeaways
The July report shows longer average days on market, with homes selling in about 28 days on average, up from 24 days a year earlier. This modest extension in time on the market indicates buyers exercising greater diligence in evaluating options and negotiating terms in a market characterized by higher borrowing costs and greater inventory choices. Time on market serves as a real-time indicator of demand strength relative to supply across neighborhoods and price tiers, and the uptick suggests a softening urgency that often accompanies improved affordability or wider selection.
The first-time buyer share’s dip to 28% of sales from 30% in June and 29% in July 2024 adds another layer to the velocity narrative. A smaller share of new entrants to homeownership implies that the market remains challenging for those paying entry-level prices, especially when rates are elevated and down-payments are a critical barrier. Meanwhile, the investor share rising to 20% of transactions signals a strategic pivot by investors toward properties that may offer attractive yields in a higher-rate environment or in supply-constrained markets where rental demand remains robust.
All-cash purchases, at 31% of transactions, mark a sizable share of market activity, reinforcing the idea that buyers with ready liquidity can secure properties in competitive segments. The combination of more cash buyers, higher investor activity, and slower pace for first-time buyers points to a market that is balancing between traditional owner-occupant demand and capital-driven demand, with each group influencing pricing dynamics in distinctive ways. The net effect is a nuanced picture of housing-market momentum that does not fit a single narrative of strength or weakness.
Lawrence Yun’s observation that the rise in affordability is nudging more buyers back into the market underscores the delicate interplay between wages, prices, and financing conditions. While prices remain elevated, the improving affordability—supported by wage growth and rate movements—can sustain demand, particularly among buyers who can leverage favorable financing terms or who benefit from a broader set of options as supply expands. The July data, therefore, reflect a market that remains resilient in high-end segments and more selective in lower-priced tiers, with liquidity and wealth effects playing a meaningful role in driving cash and investor activity.
Implications for buyers, sellers, and markets
For buyers, the July data underscore the importance of timing and price-band awareness. Higher-end buyers may find continued opportunities in properties priced above $1 million, driven by continued demand in that segment, while buyers seeking lower-priced options may face stiffer competition and longer decision times as supply expands. The prevalence of for-sale inventory and the greater array of options can support more favorable negotiating terms for buyers who have the flexibility to wait for additional price adjustments or rate shifts.
For sellers, the housing environment emphasizes the value of strategically pricing properties and aligning listings with current demand patterns. Properties in higher-demand bands and regions may still command premium prices, but competition remains stiffer in the lower-priced tiers where affordability constraints persist. Understanding regional dynamics, such as the South’s condo activity, and recognizing shifts in buyer preferences toward different property types can help sellers position listings to capture the strongest demand.
Investors and cash buyers should view the elevated share of these buyer types as confirmation of a market where liquidity and wealth effects exert influence. As cash buyers represent about one-third of transactions, properties that appeal to investors or offer stable rental yields may hold appeal even as traditional owner-occupant demand evolves. Nevertheless, rising inventory can temper some pricing momentum, creating a more nuanced investment landscape that rewards careful due diligence, market timing, and location-specific considerations.
From a macro perspective, the July results contribute to a broader narrative about the U.S. housing market’s transition. While the market remains price-rich compared with historical norms, improvements in affordability, modest rate relief, and greater inventory collectively support ongoing activity. The pace of future sales will hinge on how mortgage rates move, how quickly inventory continues to rebuild, and how wage growth tracks against home-price appreciation. The interplay among these variables will shape the trajectory of existing-home prices, sales volumes, and the overall health of the housing sector in the months ahead.
Conclusion
The July housing data from the National Association of Realtors paint a nuanced picture of a market navigating higher borrowing costs, gradually improving affordability, and a meaningful uptick in available inventory. Existing-home sales rose 2% month over month to 4.01 million units, with year-over-year gains of 0.8%. Inventory reached 1.55 million homes at month’s end, a 15.7% increase year over year, yielding a 4.6-month supply that signals a closer approach to balance, though still short of fully balanced conditions. The median price climbed to $422,400, setting a July record, while annual price gains persisted for 25 consecutive months, suggesting limited relief for buyers in some price brackets despite overall affordability improvements.
The market’s composition reveals a complex mix of demand sources and price sensitivities. Condo activity in the South points to regional diversification within the housing market, and the strongest activity remains concentrated in higher-end segments, where prices above $1 million rose 7.1% year over year. By contrast, lower price bands posted declines: 0.1% for $100,000 to $250,000 and 8% for below $100,000. The time on market lengthened to 28 days, reflecting buyers’ careful evaluation in a higher-rate environment. First-time buyers accounted for 28% of sales, down from June, while investors represented 20% of transactions, and all-cash buyers climbed to 31% of activity. Lawrence Yun highlighted that modest affordability improvements—driven by wage growth outpacing home-price growth—are nudging more buyers back into the market, even as wealth effects from stock markets and other sources support a robust cash-buying segment.
Taken together, these dynamics illustrate a housing market that is gradually stabilizing amid ongoing supply constraints and a shifting mix of demand. The July data emphasize that affordability, liquidity, and inventory will continue to shape buyer behavior, pricing power, and the pace of transactions in the near term. As mortgage-rate trends evolve and supply responds to pricing and incentives, the market will likely continue to test a potential inflection point—where affordability, inventory, and demand align to sustain steady, albeit measured, sales momentum. The pieces of the July report—sales resilience, inventory expansion, price strength, and a notable share of cash and investor activity—offer a comprehensive view of a housing market at a crossroads, balancing the legacy dynamics of supply tightness with the evolving affordability and wealth effects that influence how Americans buy homes.
