Existing-home sales have continued to moderate this summer, as higher mortgage rates and home prices give buyers more reason to take extra time in their home search.
Existing-home sales—which include single-family homes, townhomes, condos and co-ops—fell 1.7% in July compared to June but did eke out a 0.7% increase compared to a year ago, the National Association of REALTORS® reported Tuesday. Existing-home sales have continued to underperform this summer, as rising costs and a limited number of homes for sale have prompted more cautious home shoppers.
That said, this year is still showing improvement: “Home sales have been remarkably stable, even amid the rising mortgage rate environment of the past few months,” says Lawrence Yun, NAR’s chief economist. Looking at the data from just year-to-date, existing-home sales are up 2.4%, Yun notes.
The housing market’s main headwind: rising costs.
“There’s no doubt that the housing market would be thriving if average mortgage rates were to return near 6%,” Yun says.
The 30-year fixed-rate mortgage averaged 6.54% in July. But rates over recent weeks have been rising, with 30-year rates averaging 6.69%, as of Aug. 6, the highest level in more than a year, according to Freddie Mac.
Home Prices Hold Firm, Inventory Remains Limited
Meanwhile, buyers aren’t finding much relief from lower home prices. The median sales price for an existing-home was $434,100 in July, although that did mark a slight ease from the record-high median price set in June of $440,600, according to NAR’s data. Still, median home prices in July were up 2% compared to a year ago.
NAR recently reported that 80% of about 235 major metro areas it tracked continued to see home prices rise in the second quarter. Some metros even reported double-digit annual price increases of about 10%, including in Beaumont-Port Arthur Texas; Naples-Immokalee-Marco Island, Fla.; and Gulfport-Biloxi-Pascagoula, Miss.
While home prices remain strong, some sellers may be getting more mindful of not overpricing their homes as higher costs discourage more buyers from entering the market. A new report from Realtor.com showed that sellers reduced prices on 20% of active listings in July.
“Sellers are making more price adjustments as summer progresses, and buyers are responding more selectively, but homes are still going under contract at a faster pace than last year,” Danielle Hale, Realtor.com’s chief economist, said in a recent statement. “The key question for the months ahead is whether price reductions help sustain buyer engagement or signal that sellers are getting ahead of softer demand.”
As for current homeowners, they remain in a strong position, continuing to benefit from home price appreciation over recent years. Earlier this spring, NAR’s data showed that price growth has helped the typical homeowner accumulate about $128,000 in housing wealth over the past six years alone.
Housing inventories remain limited in many markets, allowing sellers to retain an advantage in pricing their home while buyers contend with fewer choices this summer. The number of homes for sale in July fell 1.9% compared to June, and inventories are down 0.6% from last year’s already-low levels.
Up against low competition, homeowners are selling relatively fast: The median time on the market for properties in July was less than a month—a median of 29 days, according to NAR’s latest data.
As for first-time buyers, their entrance into the housing market has remained tough. Without the equity from a previous home sale to put toward a purchase, many are being forced to revisit their home-shopping budgets as higher prices and mortgage rates stretch affordability. First-time buyers comprised 29% of existing-home sales in July, down from 33% in June but still up from 28% a year ago, according to the July 2026 REALTORS® Confidence Index Survey.
On the other hand, investors, second-home buyers and repeat buyers who can leverage cash from a previous sale are using it: Home buyers paying all cash for a home remain about a quarter of the home buying market, comprising 26% of existing-home sales in July.
The Region Bouncing Back
The Northeast is seeing demand rise. It was the only major region last month that saw existing-home sales increase, up 2% in July compared to June, despite home prices in the area surging 5.2% compared to a year ago, according to NAR’s data. Realtor.com recently identified the five hottest ZIP codes in the country, based on the most online property views and fastest home sales. All five are in the Northeast: 01960 in Peabody, Mass., in the Boston metro area; 07042 in Montclair, N.J., in the New York-Jersey City metro area; 08080 in Sewell, N.J., in the Philadelphia area; 14450 in Fairport, N.Y., in the Rochester metro area; and 01085 in Westfield, Mass., in the Springfield, Mass. metro area.
While existing-home sales decreased last month in the Midwest, the region continues to outperform many other parts of the country mostly due to its relatively low median home prices. “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 says.
Here’s a closer look at how existing-home sales fared across the country in July, according to NAR’s latest data:
- Northeast: Existing-home sales rose 2% in July compared to June, reaching an annual rate of 500,000. Sales are unchanged from a year ago. Median price: $563,800, up 5.2% from July 2025.
- Midwest: Sales fell 2% in July month-over-month to an annual rate of 970,000. Sales are still up 2.1% from a year ago. Median price: $342,900, up 2.8% from July 2025.
- South: Sales decrease 3.1% in July compared to June to an annual rate of 1.86 million. Sales were unchanged from a year ago. Median price: $371,700, up 0.9% from July 2025.
- West: Existing-home sales were unchanged in July compared to June, holding at an annual rate of 730,000. Sales, however, were up 1.4% compared to July 2025. Median price: $622,200, up 0.2% from a year ago.
