July home sales rise as inventory grows

Inventory has risen to its highest level since May 2020, easing pressure on prices and signaling a potential market inflection.

July home sales rise as prices near inflection point

Sales of previously owned homes rose 2 percent in July to 4.01 million units on a seasonally adjusted annual basis, the National Association of Realtors said. Analysts had expected a slight dip. Mortgage rates cooled after peaking above 7 percent in May, ending June around 6.67 percent. There were 1.55 million homes for sale at the end of July, up 15.7 percent from a year earlier, creating a 4.6 month supply of homes on the market.

The median price of an existing home sold in July was $422,400, up 0.2 percent from July 2024. Prices have risen year over year for 25 months, but the market may be at an inflection point as inventory grows and buyers gain more options. Lawrence Yun, NAR chief economist, attributed the move to improved affordability and more choices for buyers.

The rise in inventory is a relief for buyers, but the gains are modest. If mortgage rates stay low and wage growth continues to outpace price growth, buyers can take advantage of the extra choices. A quick return to higher rates could shrink the affordability gains and slow activity.

The data show a longer term pattern: supply remains below pre pandemic levels, so price gains stay a feature even as market balance improves. The inflection point will depend on policy, credit conditions, and the path of mortgage rates. Policymakers and lenders should watch affordability and inventory, not just monthly price changes.

Highlights

Market dynamics shift slowly, with supply likely to shape prices in the months ahead.