Existing-Home Sales Rise in July, Inventory Grows 19.8%

Key takeaways:

• July existing-home sales increased 1.3% month-over-month but fell 2.5% annually
• The nationwide median existing-home sales price hit $422,600 in July — a 4.2% gain from the previous year
• The inventory of unsold existing homes grew 0.8% month-over-month and 19.8% year-over-year to a 4-month supply at the current pace of sales

Existing home sales grow

Existing-home sales increased 1.3% in July compared to June, breaking a four-month streak of declines, according to the National Association of Realtors (NAR). However, sales fell 2.5% from the year before.

Meanwhile, the median existing-home sales price grew to $422,600. That rose 4.2% annually from $405,600.

“Despite the modest gain, home sales are still sluggish,” said Lawrence Yun, chief economist at NAR. “But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates.”

Regionally, the South had the most existing-home sales in July, with an annual rate of 1.79 million units. That rose 1.1% from June but down 3.8% from July 2023. The median price grew 2.3% annually to reach $372,500.

The Midwest’s 920,000 units came next, flat month-over-month and down 5.2% year-over-year. Its median price rose 4.5% to $321,300.

The West accounted for 750,000 existing sales, increasing 1.4% both from June and the year prior. Typically the costliest part of the country, the median price increased annually by 3.4% to $629,500.

The Northeast’s 490,000 sales grew 4.3% monthly and 2.1% annually. The median price jumped 8.3% from a year earlier to $505,100.

Factors influencing the market

NAR Chief Economist Lawrence Yun has pointed to two significant factors impacting existing-home sales: low for-sale inventory and high mortgage rates.

Given the ongoing lack of supply, properties on the market still receive multiple offers, especially starter- and mid-priced homes, he said. Although we saw plenty of interest rate growth in 2023 and parts of 2024, the average 30-year fixed rate mortgage (FRM) came down in July from May and June. Although inflation proved harder to bring down, it has dissipated and cuts from the Federal Reserve should be on the way.

“The housing market continues to unthaw slowly amid considerable affordability challenges brought on by high interest rates and rising homeownership expenses,” said CoreLogic Chief Economist Dr. Selma Hepp. “Lower mortgage rates later this year will provide a breather, though the average potential home buyer continues to maintain a wait-and-see approach. Improvements in existing for-sale inventory are critical and will help thaw out sales further.”

The report showed July’s housing inventory reached 1.33 million units, a 4-months supply at the current sales pace. The total units represents a 0.8% increase month-over-month and 19.8% year-over-year. The months-supply dipped from June’s 4.1 months but grew from 3.3 months a year ago. Traditionally, six months worth of inventory defines a balanced housing market.

Moreover, time on market expanded to 24 days in July, up from June’s 22 days and July 2023’s 20 days. All-cash buyers accounted for 27% of existing-sales, similar to 28% and 26% the month and year prior, respectively.

Navigating the housing market

Embarking on the journey to homeownership is an exciting and significant step in one’s life. To help you navigate this path successfully, we’ve compiled three practical tips:

1. Stay on top of housing inventory: Keep an eye on changes in inventory levels, as this can impact your choices and negotiation power. Be ready to act when the right opportunity arises.
2. Assess your budget and financing options: With low housing affordability being a factor in declining sales, it’s crucial to evaluate your financial circumstances. Explore different financing options and ensure that you find a home that aligns with your budget and long-term financial goals.
3. Be proactive and act quickly: When you find a home that meets your criteria, be proactive and act quickly to avoid missing out. The best way to do so is by securing a mortgage prequalification in advance.

The bottom line

As a homebuyer, navigating the current real estate market can feel overwhelming at times. But armed with the right knowledge, you can approach the process with confidence.

Stay informed about the latest trends, assess your budget, explore down payment assistance programs in your area, and act quickly when you find the right home.