US existing home sales post second straight monthly decline in July

WASHINGTON, Aug 11 (Reuters) - U.S. existing ‌home sales fell ​for ​a second straight month in July, and a rebound is likely to be limited by higher mortgage rates and tight supply.

Home sales dropped 1.7% ‌last month to a seasonally adjusted annual rate of 4.06 million units, ⁠the National Association of Realtors said on Tuesday. Economists polled by Reuters had forecast home resales slipping ‌to a rate of 4.05 ‌million units.

Existing home sales are counted at the closing of a contract. Last month's sales likely reflected contracts signed in May and June when mortgage rates resumed ​their upward trend after briefly pulling back amid the ongoing conflict in the Middle East. The average rate on the popular 30-year fixed-rate mortgage has jumped 71 ⁠basis points since the war started in February, data from mortgage financing firm Freddie Mac showed.

It averaged 6.69% last ​week, the highest level since July 2025. Higher mortgage rates are also discouraging some homeowners from selling, worsening the housing shortage. Many ​homeowners have mortgages with fixed rates below 5%.

Home ‌sales fell in the Midwest and South. They rose in the Northeast and were unchanged in the West. Sales increased 0.7% on ⁠a year-over-year basis in July.

"There's no doubt that the housing market would be thriving if average mortgage rates were to return near 6%," said Lawrence Yun, the NAR's chief economist.

Existing housing inventory ⁠decreased 1.9% to 1.54 million units. It was down 0.6% from a year ago. At July's ​sales pace, it would take 4.6 months to exhaust the current inventory of existing homes, unchanged from June and a year ago.

The median existing home price last month increased 2.0% from a ‌year ago to $434,100. First-time buyers accounted for 29% of sales, down from 33% in June and slightly up from 28% a year ‌ago. A 40% share in this category is needed for a robust housing market.

The median ⁠number of days on the market ‌for listed properties edged up ​to 29 from 28 in June and a year ago. Distressed sales, including foreclosures, were unchanged at 2%.

(Reporting by Lucia Mutikani; Editing by ‌Andrea Ricci)

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