‘Low turn, slow burn’ housing market kept sales down in July 

Existing home sales slowed last month as mortgage rates rose, while showing just a bit of annual improvement.

July sales were down 1.7% compared to June, but they inched up 0.7% from a year ago, according to the National Association of Realtors. That puts the annualized rate at 4.06 million, matching the pace seen in 2024 and 2025 — which tied for the lowest annual rate of sales since 1995.

Home prices continued to rise, with July's median sale price coming in at $434,100, up 2% from a year ago. Year-over-year price growth has now remained positive for 37 consecutive months.

Total unsold inventory was 1.54 million units last month, down 1.9% from June and down 0.6% compared to a year ago, the report indicated.

A 'low turn, slow burn' market

The housing market appears to be emulating today's "low hire, low fire" labor market trend, where employers are reluctant to either add workers or let them go, according to Odeta Kushi, deputy chief economist for First American. 

For housing, Kushi said, the dynamic is "low turn, slow burn."

"Price growth has slowed considerably from the pandemic years, but the market hasn't experienced the broad buildup in inventory that would produce a faster national price correction," Kushi noted.

"Low turnover then feeds back into the slow burn of prices," she said. "Weak sales would usually create more downward pressure, especially if homes accumulated on the market. Instead, the limited supply of listings has kept competition alive in many local markets."

That combination of few new listings and steady price growth, according to Realtor.com Chief Economist Danielle Hale, "will keep softer housing demand from tipping the scales too far in favor of buyers."

Rising rates deterred buyers

Elevated mortgage rates are a likely culprit behind July's slow sales. Average 30-year mortgage rates have climbed for five straight weeks, and at nearly 6.7%, they are now higher than levels seen a year ago.

"Unlike the new home market, where builders can use incentives like mortgage rate buydowns to encourage sales, existing homeowners have fewer tools to offset today's financing costs," said Sarah Bonnarens, director of economic research at NewHomeSource.

Homes more affordable than last year

Even though mortgage rates and median home prices rose in July, affordability improved throughout the country, according to NAR's Housing Affordability Index. The index reached 103.3 last month, up from 98.3 in July 2025.

The biggest gains were seen in the West (+7.3%) and South (+6.1%). The Midwest saw affordability improve 4% year-over-year, while the Northeast index inched up 1.5%.

A sales bump in the Northeast

Despite showing the smallest affordability gains and the steepest annual increase in median home prices (5.2%), the Northeast was the only region to post an increase in existing home sales, which were up 2% from June to July. 

Sales fell 2% in the Midwest and 3.1% in the South, but were flat month-over-month in the West.