T
he housing market may be showing signs of improvement heading into the fall, with existing home sales increasing 2% in July and mortgage rates holding steady at 10-month lows. According to the National Association of Realtors, existing home sales rose to a seasonally adjusted annual rate of 4.01 million in July, up from June but still down 0.8% year-over-year.

    The median sales price remained flat year-over-year, increasing just 0.2% to $422,400. However, NAR Chief Economist Lawrence Yun noted that the near-zero growth in home prices suggests that roughly half of the country is experiencing price reductions. Yun attributed the slight improvement in housing affordability to wage growth outpacing home price growth and buyers having more choices.

    Mortgage rates have been holding steady at 10-month lows, with the 30-year fixed-rate mortgage hovering just below 6.6%. While lower mortgage rates are needed to bring more buyers into the market, economists believe that inventory is expected to grow in 2026, setting the stage for more buyer opportunities.

    Uncertain economic conditions continue to give buyers and sellers pause, with potential sellers holding off as they wait to see whether demand will improve. Redfin data shows that 15.3% of home agreement contracts were canceled last month, the highest rate for July since 2017. Buyers are hesitant due to high prices, mortgage rates, and economic uncertainty.

    Despite these challenges, hints of buyer interest remain, with purchase application volume well ahead of last year's pace. However, inventory has slowed significantly as sellers wait for demand to improve, leading to an increase in home prices in recent weeks. If inventory starts shrinking, prices may continue accelerating, but homes spending more time on the market could help counter overall price increases if sellers become more willing to negotiate.