Sales of existing homes slipped 1.7% in July to a seasonally adjusted annual rate of 4.06 million, the National Association of Realtors reported yesterday, as the U.S. median sales price climbed 2% from a year earlier to $434,100—a record for the month of July. At the same time, the 30-year fixed-rate mortgage averaged 6.69% as of August 6, 2026, the highest level in more than a year and the fifth consecutive weekly increase.
The combination is proving difficult for buyers. The median existing-home price rose 2.0% to $434,100, marking 37 straight months of year-over-year gains, while the existing home inventory level was 1.54 million units in July, down 1.9% from June and down 0.6% from a year ago. Despite the monthly decline, sales were up 0.7% from a year earlier, and NAR said year-to-date sales remain 2.4% higher than the same stretch of 2025.
“Home sales have been remarkably stable, even amid the rising mortgage rate environment of the past few months,” said NAR Chief Economist Lawrence Yun. He added that “there’s no doubt that the housing market would be thriving if average mortgage rates were to return near 6%”.
The numbers
Sales slip but remain above last year’s pace
The July decline follows a 2.4% drop in June, signaling continued sensitivity to borrowing costs.
Existing-home sales decreased by 1.7% month-over-month to 4.06 million units on a seasonally adjusted annual basis, according to the NAR’s official report. The decline was uneven across the country: sales fell in the South (-3.1%) and Midwest (-2.0%) but rose in the Northeast (+2.0%), while sales in the West were unchanged in July.
On an annual basis, the picture is slightly brighter. Year-over-year, sales increased in the Midwest (+2.1%) and West (+1.4%) but remained unchanged in the Northeast and the South. The report reflects closings in July, which means most of these contracts were signed in May and June, before mortgage rates began their recent climb.
Key figures for July 2026
4.06 million: seasonally adjusted annual sales rate, down 1.7% from June but up 0.7% from July 2025.
$434,100: national median existing-home price, up 2.0% year-over-year and a record for the month of July.
1.54 million units: total inventory, down 1.9% from June and 0.6% from a year ago.
4.6 months: supply of unsold inventory at the current sales pace, unchanged from June and July 2025.
29 days: median time on market, up from 28 days in the previous month and July 2025.
Prices and inventory
Record July prices as inventory remains tight
Home prices have now risen for 37 consecutive months, even as the supply of homes for sale edges lower.
The national median existing-home price rose 2.0% year-over-year to $434,100 in July, NAR said, marking the 37th consecutive month of annual price gains. That figure represents a record for the month of July, though it’s below the all-time high for any month of $442,800, set in June, on data going back to 1999. Regional prices varied: the Northeast led at $564,800 (up 3.9% year-over-year), followed by the Midwest at $346,600 (up 2.7%), the South at $377,700 (up 0.9%), and the West at $633,600 (up 0.9%).
Inventory remains the market’s Achilles’ heel. At the current sales rate, July unsold inventory sits at a 4.6-months’ supply, unchanged from last month and a year ago. A six-month supply is generally considered a balanced market; anything below that favors sellers. The 1.54 million homes on the market in July is far below the pre-pandemic norm. Homes stayed on the market for a median of 29 days in July, a slight uptick that suggests buyers are taking more time to weigh their options as affordability worsens.
For condos and co-ops, the median price in July was up 2.2% from a year ago at $371,800. These properties often serve as entry points for first-time buyers, but even that segment has seen steady price growth.
Mortgage rates
Borrowing costs hit a 2026 high
Rates have climbed for five straight weeks, reaching levels not seen since mid-2025.
NAR’s report pegged the average 30-year fixed mortgage rate at 6.54% in July, up from 6.49% in June but still below the 6.72% recorded a year earlier. Since then, however, rates have continued their march upward. Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed rate at 6.69% for the week ending August 6, its fifth straight weekly increase and the highest level of 2026.
The average 30-year fixed-rate mortgage was 6.69% through Wednesday, according to Freddie Mac data, to the highest level since the end of July 2025. Government bond yields, which mortgage rates closely track, rose rapidly in late July as investors began to fret about the Federal Reserve’s commitment to fighting inflation. The recent spike in rates comes at a particularly bad time for buyers, many of whom had hoped borrowing costs would ease as the year progressed.
Forecasts offer little relief. In general, experts seem to agree that rates will hover between 6% and 7% for most of the next few years. Fannie Mae expects 30-year fixed rates to average 6.3% through 2026 and 2027, while the MBA projects rates reaching 6.5% by the fourth quarter of 2026 and holding there through 2027. For a buyer financing $400,000, the difference between a 6% rate and a 6.69% rate is roughly $200 more per month—$2,400 a year.
What higher rates cost you
On a $350,000 mortgage at 6.69% (the current average), your monthly principal and interest payment is roughly $2,280. At 6.0%, that same loan costs about $2,098—a difference of $182 per month, or $2,184 per year. Over 30 years, that’s more than $65,000 in additional interest. If you’re comparing loan offers, even a quarter-point difference in rate matters: Freddie Mac finds one extra rate quote saves borrowers roughly $600 over a loan’s life, and three quotes up to $1,200.
Who’s buying
First-time buyers pull back as cash buyers gain ground
Affordability pressures are reshaping the buyer pool, with fewer entry-level purchasers and more all-cash deals.
The first-time buyer share was 29% in July, down from 33% in June but up from 28% a year ago. That June-to-July drop is consistent with seasonal patterns—young families often rush to close before the school year begins, and activity tapers once summer wanes—but the broader trend is concerning. First-time buyers have historically made up 40% or more of the market; today’s share remains well below that threshold.
Meanwhile, all-cash buyers continue to play an outsized role. While the NAR’s detailed buyer breakdown for July wasn’t included in the main release, recent months have shown cash transactions hovering around 25% to 29% of all sales. All-cash buyers are less affected by changes in interest rates, giving them a significant advantage in competitive markets. This dynamic is squeezing out buyers who need financing, particularly those with smaller down payments or lower credit scores.
If you’re a first-time buyer, this environment demands strategy. Look into first-time buyer programs that offer down payment assistance, closing cost grants, or lower mortgage rates. Many states and cities have programs that can put you on more equal footing with cash buyers. You’ll also want to explore low-income assistance programs and zero-down loan options like VA, USDA, and certain state-backed mortgages.
What to do
How to navigate a tight, expensive market
Buying in this environment takes patience, flexibility, and a clear understanding of what you can afford.
First, get pre-approved for a mortgage—not just pre-qualified. A full pre-approval with a credit check and income verification shows sellers you’re serious and can close quickly. In a market where homes are moving in under 30 days, that credibility matters. Compare offers from at least three lenders; rates and fees vary more than most buyers realize. Use our mortgage and financing guide to understand loan types, rate locks, and how to negotiate with lenders.
Second, revisit your budget. The median monthly payment was $2,191 in June 2026, according to the Mortgage Bankers Association’s purchase applications payment index. That figure doesn’t include property taxes, insurance, HOA fees, or maintenance. Use our affordability calculator to see what you can truly handle month-to-month. If the numbers don’t work, consider waiting, expanding your search area, or looking at less competitive property types like condos or townhomes.
Third, move quickly when you find the right home. Homes stayed on the market for a median of 29 days in July, and the best-priced listings often go under contract within a week. Work with a buyer’s agent who knows the local market and can help you craft a competitive offer. That might mean waiving minor contingencies, offering a flexible closing date, or writing a personal letter to the seller—but never waive your inspection or appraisal contingency without fully understanding the risk.
Finally, don’t ignore your credit score. Even a small improvement—say, from 680 to 700—can lower your rate by a quarter-point or more, saving you thousands over the life of the loan. Check your credit report for errors, pay down high-balance credit cards, and avoid opening new accounts in the months before you apply. Our guide for buyers with bad credit has step-by-step advice on repairing your score and finding lenders who work with lower-credit borrowers.
Resources for buyers right now
First-time buyers: See first-time buyer programs for grants, tax credits, and education requirements in your state.
Low income or no down payment: Check assistance programs and zero-down loans (VA, USDA, and state programs).
Worried about rates: Read our financing guide for tips on rate locks, points, and refinancing.
Making an offer: Learn the process in our negotiating guide, including how to compete without overpaying.
Quick answers
July home sales: common questions
Why did home sales fall in July if prices are still rising?
Sales and prices don’t always move in lockstep. Sales fell 1.7% in July to 4.06 million, largely because mortgage rates averaged 6.69% as of August 6, the highest in over a year, making monthly payments unaffordable for many buyers. But inventory was only 1.54 million units, down from June and a year ago, representing a 4.6-months’ supply. When supply is tight, prices stay elevated even if fewer people can afford to buy. The buyers who do have the income or cash to purchase are competing for a limited number of homes, which keeps upward pressure on prices.
Is now a bad time to buy a house?
It depends on your situation. If you need a home—because of a job relocation, a growing family, or rental costs that rival a mortgage payment—waiting may not save you money. Prices have risen for 37 consecutive months, and there’s no guarantee they’ll fall. Rates may come down eventually, but experts agree that rates will hover between 6% and 7% for most of the next few years. If you can afford the payment today and plan to stay in the home for at least five years, buying now locks in your housing cost. You can always refinance later if rates drop. But if your budget is maxed out or you’re not sure where you want to live, renting and saving a larger down payment may be the smarter move.
What is the median home price right now?
The U.S. median sales price was $434,100 in July, up 2% from a year earlier. That’s a record for the month of July, though the all-time high for any month was $442,800 in June. Regional prices vary widely: the Northeast led at $564,800, the West was $633,600, the Midwest $346,600, and the South $377,700. Keep in mind the median is the midpoint—half of homes sold for more, half for less—so your local market may look very different.
How much inventory is on the market?
The existing home inventory level was 1.54 million units in July, down 1.9% from June and down 0.6% from a year ago. That translates to a 4.6-months’ supply at the current sales rate, unchanged from last month and a year ago. A balanced market typically has a six-month supply, so we’re still in seller-favorable territory. Low inventory is one of the main reasons prices keep climbing. If you’re shopping, expect competition and be ready to move quickly when you find a home that fits your needs and budget.
Are mortgage rates going to come down soon?
Not likely in the next few months. Rates hit 6.69% for the week ending August 6, the fifth straight weekly increase and the highest level of 2026. Government bond yields rose rapidly in late July as investors began to fret about the Federal Reserve’s commitment to fighting inflation. Most forecasts expect rates to stay in the mid-6% range for the rest of 2026 and into 2027. Fannie Mae expects rates to average 6.3% through 2026 and 2027, while the MBA projects 6.5% by the fourth quarter of 2026. If you’re waiting for rates to drop below 6%, you may be waiting a long time. Focus on what you can control: your credit score, your down payment, and shopping multiple lenders for the best rate available to you today.
What percentage of buyers are first-time buyers?
The first-time buyer share was 29% in July, down from 33% in June but up from 28% a year ago. That’s well below the historical norm of 40% or more. High prices and high rates are squeezing out entry-level buyers, many of whom are competing against cash buyers and repeat buyers with substantial equity from previous homes. If you’re a first-time buyer, look into first-time buyer programs, down payment assistance, and low- or zero-down loan options to improve your odds.