US existing home sales in July registered a seasonally adjusted annual rate of 4.06 million, slightly above the consensus estimate of 4.05 million, according to data released by the National Association of Realtors on August 11.

The prior month's figure was originally reported at 4.09 million but has been revised upward to 4.13 million.

Key July Data:

• Sales: -1.7% month-over-month versus a prior reading of -2.4% (revised to -1.4%)
• Home prices: +2.0% year-over-year
• Median price: $434,100
• Inventory: 4.6 months of supply, unchanged from the prior month

Because existing-home sales are recorded at closing — typically 30 to 60 days after a contract is signed — July's figures largely reflect purchase decisions made in May and June, making the series a lagging indicator of housing demand.

The housing market remains in a steady state, with elevated mortgage rates — driven by rising Treasury yields and shaped by Federal Reserve policy expectations — continuing to weigh on activity. Adjusting for CPI, affordability has shown a slight but steady improvement. A key open question is the trajectory of borrowing rates going forward, with market participants closely watching the Fed's next moves for signals on whether mortgage rates will ease meaningfully.

A longer-term structural concern is that US home construction has not kept pace with household formation, creating a supply gap that may eventually require a meaningful pickup in building activity. The 4.6 months of supply currently on the market remains below the roughly six months generally associated with a balanced housing market. Builders, however, may need a stronger price signal before accelerating construction.

Existing-home sales represent the largest component of the US housing market and are closely monitored for signals on household confidence, affordability, mortgage demand, and housing-related spending. The data cover closings of single-family homes, townhomes, condominiums, and co-ops, making the series broader and generally less prone to revision than new-home sales figures, which are based on contract signings.

May Recovery Context

Through May, the market had been showing a modest recovery from the rate-driven weakness that has depressed turnover since 2022. Sales rose 3.2% from April and were also up 3.2% year-over-year, reaching a seasonally adjusted annual rate of 4.17 million — the strongest pace since December. Single-family homes drove the improvement, with sales up 3.5% month-over-month to a 3.80 million annualized pace, while condo and co-op sales were unchanged at 370,000.

Affordability improved somewhat, with the NAR's affordability index rising to 105.6 from 97.5 a year earlier as income growth outpaced home-price gains in many regions. Even so, affordability remains the central constraint on the market. The average 30-year fixed mortgage rate was 6.44% in May, higher than in April but below the 6.82% rate recorded a year earlier.

Inventory has been moving in the right direction, though only gradually. Unsold supply rose 3.3% in May to 1.55 million homes, equivalent to 4.5 months of supply. Despite the increase in listings, prices remained firm: the national median existing-home price rose 1.3% year-over-year to a May record of $429,300, suggesting that additional supply has yet to produce broad-based price relief. First-time buyers accounted for 35% of sales, while cash buyers held steady at 25%.

Previous month's report