• Existing homes sales increased by 1.3% in July to a seasonally adjusted annual rate (SAAR) of 3.95M and are now down 2.5% from July 2023, according to the National Association of Realtors (NAR).
• Total housing inventory at the end of July increased to 1.33 million units from 1.32 million units in June, up 19.8% from a year ago.
• The median existing-home sales price in July was $422,600, 4.2% higher than a year ago, up from the 4.1% year-over-year increase in June.

What happened: In July, existing home sales reached 3.95 seasonally adjusted annual rate, slightly exceeding Zillow’s expectations based on its forecasts ahead of this report. This marks a welcome step back to a steady recovery from last year’s levels.

Why it matters: Existing Home Sales rebounded from a low point in June, indicating a return to a more typical pattern. This occurred before the release of the recent weak jobs report, with average mortgage rates in July dropping nearly 30 basis points compared to June.

As existing home sales are picking up, more homeowners are listing their properties for sale to keep up with demand, leading to a gradual increase in existing home inventories. However, the number of homes available at any given time is still lower than before the pandemic, which is keeping prices on the rise.

Moving forward into the later home shopping season during the summer months, continued improvements in mortgage rates are expected to drive more home sales. However, we are also entering a period of uncertainty for reasons that are often overlooked by econometric models: the behavior of buyers who may be holding out for further rate drops with growing confidence in an upcoming Fed rate cut, and the significant uncertainty surrounding the approaching elections. These factors may influence major decisions and have an impact on existing home sales as we near the end of the year.