Monthly home sales slowed their descent but continued a downward trajectory, as reported by the National Association of Realtors® (NAR) Tuesday.
Between June and July, existing-home sales decreased 1.7%, bringing the seasonally adjusted annual rate from 4.09 million to 4.06 million.
Despite the drop month-over-month, NAR Chief Economist Lawrence Yun highlighted the stabilization of the existing-home sales.
“Home sales have been remarkably stable, even amid the rising mortgage rate environment of the past few months,” Yun said in a statement. “Year-to-date sales are up 2.4% and there’s no doubt that the housing market would be thriving if average mortgage rates were to return near 6%.”
Momentum on a year-over-year basis continues to grow but slows its pace as NAR reported a 0.7% increase in existing-home sales, a foreseen decline after the May (3.2%) and June (2.8%) reports showed substantial yet diminishing year-over-year gains.
In a conference call discussing the results, Yun described mortgage rate behavior working in a “V” fashion. “Even though home sales are stable, mortgage rates are changing,” he said.
Despite gains in affordability on paper, Yun notes that the overall economic temperature and consumer sentiment remains lackluster when centering around socioeconomic status.
“Home sales by price category—the million-dollar-plus homes—are moving better,” he said. “One looks at the million-dollar-plus properties, home sales are up 15% from one year ago.”
“Along with the real estate valuation being at record high—the upper-end market is doing relatively well—we are well aware, acutely aware of the fact that consumer sentiment index, economic sentiment and such, are at historically low, which is a testament to the continuing K-shaped economy. The top end of the market continues to improve while the lower segment of society clearly shows frustration with the economic conditions overall.”
Realtor.com®’s Chief Economist Danielle Hale described the report as “consistent with a pattern we’ve seen each month in 2026,” in a statement.
Other economists noted the impact of mortgage rates on buyer decision-making. “The modest uptick in closed sales in July also suggests that there was an influx of buyers getting into the market and making offers in June as mortgage rates stabilized around 6.5%,” Bright MLS Chief Economist Lisa Stuartevant said in a statement. “Since then, rates have increased and forward-looking indicators suggest a late summer market slowdown ahead.”
On both a monthly and yearly basis, NAR reported that inventory has decreased—by 1.9% and 0.6% respectively—to 1.54 million units. NAR estimated that the nation’s unsold inventory sits at a 4.6-month supply, which remains steady from last year and one month ago.
Regional disparities
On a nation-wide level existing-home sales are showing stabilizing behavior, but Yun notes that regional differences reveal a different story. “Though the national data shows stabilization, there are notable local market variations.”
The Northeast was the only region to see positive gains on a month-over-month basis with a 2% increase in sales, maintaining the previous year’s annual rate of 500,000. The region also experienced the greatest increase (5.2%) in median existing-home sales price, reaching over half a million at $563,800.
Nationally the median sales price increased by 2% from the previous year, with NAR’s estimate of $434,100 showing slight growth compared to last year’s estimate of $425,700. This marks the 37th consecutive month of year-over-year price increases, according to NAR.
The South underwent the biggest decrease in month-over-month sales with a 3.1% decrease, yet their annual rate of 1.86 million remains unchanged from July 2025. The median price for home sales saw a minor increase of 0.9% on a yearly basis with the median price remaining below the national price at $371,700.
Midwestern states also experienced a slight decline in month-over-month sales with a 2% decrease, but the annual rate of 970,000 grew 2.1% from last year’s report. NAR’s estimates for the region continue to display positive growth as the median price increased 2.8% from July 2025, coming up with a median price of around $342,900.
NAR’s latest home price and affordability report also noted a 3.6% climb in single-family home prices on a yearly basis.
“In smaller cities, and particularly in the Midwest, an annual household income of $60,000 would be sufficient to buy a median-priced home,” Yun stated.
The West saw the most limited changes according to NAR’s report. Month-over-month sales remain unchanged in that region at an annual rate of 730,000, but have increased by 1.4% since the same time last year. The West’s median price continues to blow other regions out of the water at $622,200, a slight increase of 0.2% from July 2025.
Affordability: Yea or nay?
While each region of the U.S. experienced varying changes to existing-home sales rates and prices, NAR reported that affordability improved on a year-over-year basis across the nation.
Western states had the greatest improvement in affordability with a 7.3% increase, followed by the South (6.1%), Midwest (4%) and the Northeast in last place with a 1.5% increase.
The housing affordability outlook for July may signal an optimistic perspective for consumers, as overall sentiment about the economy remains low but slowly rising. The latest survey from the University of Michigan for July came in at 55.2, an increase from June’s report of 49.5.
Yun emphasizes the power of mortgage rates on existing-home sales, which sits roughly at 6.54% according to Freddie Mac. This is slightly higher than June’s estimate of 6.49% and slightly lower than last year’s estimate of 6.72%.
Coupled with mortgage rates, Yun highlighted NAR’s focus on Realtor® sentiments for July’s home sales, and notes that, “Realtors® are not that enthusiastic about what may happen in the upcoming months.”
“In just the month of July, only 14% believe that there will be an increase in buyer traffic in the upcoming months, while 17% indicated increased seller traffic in the upcoming months,” he said.
He stated that despite the expected seasonal decline in the market, their estimates are, “a little softer” compared to the same time period in 2025.
“Some Realtors® are a little cautious about buyer prospect or seller prospect in the upcoming months, and definitely compared to one year ago this time, they are seeing a little softer conditions.”
Sarah Bonnarens—the director of Economic Research at new construction listing portal NewHomeSource—notes the impact of borrowing costs on affordability.
“The housing market is essentially in cold storage, with many buyers and sellers waiting for conditions to thaw,” she said. “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.”
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