Existing-home sales in the United States edged higher in July, marking a modest rebound after a slowdown in June, according to data released by the National Association of Realtors (NAR) on August 21. Sales increased by 2.0% to a seasonally adjusted annual rate of 4.01 million units, reflecting a 0.8% rise compared to the same period last year.
Modest Sales Recovery Supports Housing Market Stability
The July rebound continues a trend of steady, though subdued, activity in the resale housing market, which has remained roughly 25% below pre-pandemic norms for three years. This pattern highlights persistent headwinds for buyers and sellers alike, amid elevated home prices and tightening lending conditions.
NAR Chief Economist Lawrence Yun attributed the recent uptick to marginally improved affordability and stronger wage growth, stating, “Buyers are benefiting from more choices in the market, supported by a constrained but gradually expanding inventory.” Yun further noted that several regions have seen prices stabilize, with some even experiencing slight declines a shift from the rapid price acceleration witnessed during the pandemic.
Despite these regional variations, homeowners have retained strong equity positions, with typical home values rising by approximately 49% since mid-2019. “This cumulative price appreciation keeps existing homeowners in a strong financial position,” Yun explained, underscoring the market’s resilience despite ongoing economic uncertainties.
Regional Sales and Price Trends Show Diverging Patterns
The Northeast saw the strongest gain with an 8.7% rise in sales, accompanied by modest price appreciation. The Midwest experienced a slight dip in sales but continued to post year-over-year price growth near 4%. The South and West regions showed modest sales gains but registered small declines in median home prices.
Real estate analysts interpret these disparities as reflective of local economic conditions and varying supply-demand dynamics. “Regions with more inventory and slower price growth are providing relief for prospective buyers, though affordability remains a challenge,” said Jessica Lautz, NAR Vice President of Demographics and Behavioral Insights.
Inventory Growth Enhances Buyer Negotiating Power
Housing inventory increased modestly to 1.55 million units in July, a 0.6% rise from June and a substantial 15.7% increase year-over-year. While still historically tight by long-term standards, this growth represents the highest level of supply since May 2020.
The months’ supply of unsold homes a key gauge of market balance stood at 4.6 months, slightly down from 4.7 months in June but up from 4.0 months a year earlier. This figure suggests a gradual easing of seller market conditions, granting buyers greater room for negotiation.
Importantly, distressed sales remain at historically low levels, accounting for just 2% of all transactions in July, down from 3% in the previous month. Meanwhile, the median time a home stays on the market lengthened slightly to 28 days.
Changing Buyer Composition Reflects Market Dynamics
New data reveal shifts in buyer profiles. The share of first-time homebuyers declined to 28% in July from 30% in June, indicating persistent affordability challenges for entry-level purchasers. Conversely, cash sales climbed to 31%, and the share of investor or second-home buyers rose to 20%, up from 14% the prior month.
Industry experts suggest that investor activity may be driven by attractive rental markets and opportunities to acquire homes as prices stabilize or decline in certain areas. “Investor demand can further complicate affordability for typical buyers, particularly in competitive markets,” noted Mark Fleming, Chief Economist at First American Financial Corporation.
Broader Market Context and Outlook
The current housing market environment reflects a transition from the pandemic’s heated conditions to a more balanced, if cautious, phase. After years of rapid appreciation fueled by record-low mortgage rates and constrained supply, the industry is adapting to higher borrowing costs and growing economic uncertainty.
According to Freddie Mac, the average 30-year fixed mortgage rate hovered near 7% in July, roughly double the levels seen in 2021. This increase has dampened buyer purchasing power, contributing to slower sales and a slowdown in price growth.
However, some experts view the modest sales rebound and inventory gains as encouraging signs. “We are witnessing a market correction that improves affordability and provides more options for buyers without triggering a sharp price decline,” observed Selma Hepp, Senior Economist at Zillow.
Going forward, the trajectory of existing-home sales will hinge on factors such as mortgage rate fluctuations, wage growth, and housing supply constraints at the local and national levels. Policymakers and industry stakeholders are closely monitoring these variables amid concerns over economic headwinds, including inflation and geopolitical tensions.
Key National Housing Market Indicators (July 2025)
- Total Housing Inventory: 1.55 million units (up 15.7% YoY)
- Unsold Inventory Supply: 4.6 months (up from 4.0 in July 2024)
- Median Existing-Home Price: $422,400 (up 0.2% YoY)
- Typical Time on Market: 28 days (up from 24 days a year ago)
- First-Time Homebuyer Share: 28% (down from 30% in June)
- Cash Sales Share: 31% (up from 29%)
- Investor/Second-Home Buyer Share: 20% (up from 14%)
- Distressed Sales Share: 2% (down from 3%)
As the U.S. housing market continues to normalize following pandemic-induced volatility, the balance between supply, demand, and affordability will remain crucial in shaping future trends. Buyers and sellers alike are advised to monitor economic developments and mortgage conditions carefully as they navigate the evolving landscape.
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