July Sales Showcase Resilience
In July 2025, sales of previously owned homes in the United States experienced a notable increase of 2% compared to June, reaching a seasonally adjusted, annualized rate of 4.01 million units. This rise contradicts the expectations of housing analysts who had predicted a slight decline. It’s even more promising to see that home sales were 0.8% higher than the same month a year earlier, indicating a resilient housing market amidst varying economic conditions.
Growing Inventory at Historic Levels
The inventory of homes available for sale by the end of July climbed to 1.55 million, which marks a significant increase of 15.7% from July 2024. This surge in inventory is the highest seen since May 2020. Currently, the home supply stands at 4.6 months, which is still below the six-month supply considered balanced between buyers and sellers. The ongoing increase in available homes is clearly relieving some of the pressure on prices.
Price Trends and Inflection Points
While inventory grew, so did the challenges for home prices. The median price of an existing home in July was $422,400, which is an increase of 0.2% from a year prior and represents a record high for the month. This marks a significant milestone, as prices have been rising annually for the last 25 months. However, Lawrence Yun, the chief economist for the National Association of Realtors (NAR), suggests we may be approaching an inflection point for home prices as wage growth outpaces this increase.
Shifts in Buyer Composition
The July market showed a shift in buyer demographics as well. First-time homebuyers represented 28% of home sales, down from 30% in June and 29% in July 2024. Meanwhile, the share of cash buyers reached 31%, an increase from 27% the previous year. This rise in cash transactions could be attributed to high mortgage rates pushing more buyers towards all-cash deals. Interestingly, investors accounted for 20% of all transactions, up from 13% in July 2024, likely driven by the increased supply of available homes.
Market Dynamics in the Luxury Segment
Interestingly, the market activity has been especially robust at the higher end. Sales for homes priced over $1 million rose by 7.1% year-over-year, while properties priced between $100,000 and $250,000 saw a slight decline of 0.1%. Conversely, homes priced below $100,000 exhibited an 8% decline in sales. This scenario highlights the shifting preferences and capabilities of buyers regarding pricing tiers.
Longer Selling Times Reflecting Market Adjustments
As the home sales landscape evolves, sellers are adjusting their expectations. Homes in July took an average of 28 days to sell—an increase from the 24 days reported the previous year. Such trends point to a more measured marketplace where buyers are taking their time amidst rising prices and shifting inventory levels.
Conclusion: An Evolving Landscape
The July market reveals a complex narrative rife with opportunities and challenges for homebuyers, sellers, and investors alike. While an increase in inventory is providing relief for prices, ongoing fluctuations in the market will continue to shape buyer behaviour moving forward. With mortgage rates remaining relatively high, these market dynamics suggest a measured approach as buyers navigate through the evolving housing landscape.
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