According to the National Association of Realtors, sales of existing homes rose 1.3% in July from June to a seasonally adjusted annualized rate of 3.95 million, the first increase in five months.
Sales decreased 2.5% compared to the same period last year.
Sales increased the most in the Northeast and remained steady in the Midwest, with prices also increasing the most in the Northeast.
“Home sales remain sluggish despite a slight increase,” Lawrence Yun, chief economist for the National Association of Realtors, said in a statement. “But consumers certainly have more options and lower interest rates are making home affordability better.”
These sales were likely based on contracts signed in May and June, when mortgage rates for the popular 30-year fixed loan were well above 7%. Rates began to fall in July and are now hovering around 6.5%.
All-cash purchases made up 27% of sales in July, up from 26% a year ago and well above historical norms.
The supply of homes for sale continued its upward trend in July: At the end of the month, 1.33 million homes were on the market, up 0.8% from June and 19.8% above July 2023. At the current sales pace, this is equivalent to four months’ worth of supply, down slightly from June.
But the increased supply did not translate into a decline in home prices: The median price of an existing home sold in July was $442,600, up 4.2% from a year ago.
First-time homebuyers made up 29% of home sales in July, unchanged from June but down from 30% in July 2023. Historically, these buyers have made up nearly 40% of home sales, but home affordability has taken a big hit over the past two years due to skyrocketing home prices and rising mortgage rates.
With interest rates now slightly lower, demand is starting to pick up: A separate report from real estate brokerage Redfin found that requests to its agents for tours and other buying services rose 4% last week, hitting a two-month high.
Correction: An earlier version of this article misstated the duration of the decline in home sales.
