The U.S. housing market showed signs of life in July, with existing-home sales ticking upward as mortgage rates dipped slightly and price growth slowed.
According to the National Association of Realtors (NAR), sales of previously owned homes rose 2% from June, reaching a seasonally adjusted annual rate of 4.01 million units. That figure also marked a 0.8% increase year-over-year, and it exceeded economist expectations of 3.92 million (FactSet, 2025).
Prices Cooling, But Still High
While July brought the 25th consecutive month of annual price increases, the pace has slowed considerably. The national median sales price rose just 0.2% year-over-year to $422,400—the smallest annual gain since June 2023. Still, that figure represents the highest median price for any July on record, with data dating back to 1999.
“Wage growth is now comfortably outpacing home price growth, and buyers have more choices,” said Lawrence Yun, NAR’s chief economist. “The ever-so-slight improvement in housing affordability is inching up home sales.”
Affordability Still a Challenge
Despite the modest rebound, affordability remains a major hurdle. Mortgage rates have stayed elevated for much of 2025, though the average rate on a 30-year loan briefly dipped to 6.67% in July, its lowest point in nearly a year. First-time homebuyers continue to struggle, making up just 28% of July’s sales—well below the historical average of 40% (NAR, 2025).
More Homes on the Market
One bright spot for buyers is increasing inventory. At the end of July, there were 1.55 million homes for sale, a 15.7% jump from a year earlier and the highest level since May 2020. However, supply still lags behind pre-pandemic norms, when about 2 million homes were typically on the market.
At the current pace, July’s inventory translates to a 4.6-month supply, compared with the 5–6 months generally considered a balanced market. Homes are also taking longer to sell, with properties averaging 28 days on the market, up from 24 days a year earlier.
What It Means for Buyers and Sellers
For those able to purchase in today’s market—or those paying in cash—the combination of slower price growth and rising inventory offers more negotiating power. In fact, about 20.6% of July listings saw price reductions (Realtor.com, 2025). Many sellers, particularly in the South and West, are also offering concessions such as closing cost assistance or repair credits.
While affordability challenges remain, July’s data suggests the market may be slowly shifting in favor of buyers after several years of intense competition.