Pending home sales inched up in July—rising 0.7% from a month earlier to the highest level since the start of the year on a seasonally adjusted basis. Still, they were only 5.4% above the low point they hit in March. Pending sales fell 15.7% year over year, the smallest annual decline since last summer.
Pending sales have stabilized as the shock of elevated mortgage rates has subsided. They dropped to 367,000 in March—the lowest since the onset of the pandemic—and have been hovering around that level ever since (they clocked in at 387,000 in July) as prospective buyers continue to be discouraged by high housing costs and a lack of homes for sale.
“Home sales hit a bottom in 2022 and haven’t meaningfully budged since,” said Redfin Chief Economist Daryl Fairweather. “Fading recession fears and the prospect of further home price increases have brought some house hunters off the sidelines, but for the most part, buyers remain hesitant to jump into the market because their buying power is so much lower than it was a year ago.”
The average 30-year-fixed mortgage rate was 6.84% in July, up from 6.71% a month earlier and 5.41% a year earlier—and it has climbed even higher since. As of Thursday, it was 7.23%—the highest since 2001. That, along with stubbornly high home prices, has sent the typical homebuyer’s monthly mortgage payment up substantially from a year ago.
The median home sale price rose 1.7% year over year to $421,872 in July—the first annual increase since the start of the year. That’s just 2.5% below the record high of $432,476 set in May 2022.
Housing prices have remained high despite sluggish homebuyer demand because there are so few homes on the market, meaning the buyers who are out there are frequently competing for a small pool of properties. The total number of homes for sale (active listings) fell 3.9% month over month in July to the lowest level on record on a seasonally adjusted basis, and dropped 19.5% from a year earlier. That’s the biggest annual decline in more than two years.
“It’s a seller’s market, but only because there’s so little inventory,” said Salt Lake City Redfin Premier real estate agent Mitch Price. “Buyers are getting hammered by high interest rates, so they’re not just jumping on whatever is available like they were before. They don’t want to overpay, so they’re waiting for the right home. As a seller, if you overprice your home, that’s your doomsday ticket.”
Housing supply is dwindling because high mortgage rates are dissuading homeowners from selling. New listings in July were little changed from a month earlier, rising 0.5% on a seasonally adjusted basis, but they were down 22.2% from a year earlier. Nearly every U.S. homeowner with a mortgage has an interest rate below 6%, prompting most to stay put because selling and buying a new home would likely mean taking on a much higher monthly payment.
Note: Data is subject to revision
Data in the bullets below came from a list of the 91 U.S. metro areas with populations of at least 750,000. Select metros may be excluded from time to time to ensure data accuracy. A full metro-level data table can be found in the “download” tab of the dashboard embedded below or in the monthly section of the Redfin Data Center. Refer to our metrics definition page for explanations of metrics used in this report. Metro-level data is not seasonally adjusted.
