Could Lower Rates Help Unlock the Market This Fall?

The latest data from the National Association of Realtors (NAR) shows that existing-home sales fell in June. Yet despite slower activity, prices continued to climb. For buyers and sellers alike, the market remains in flux, shaped by low inventory, elevated mortgage rates, and long-term supply constraints.

Who’s Buying and Who’s Not

First-time buyers made up 30% of June’s sales, matching May and edging out last year’s 29%. Cash buyers accounted for 29%, while investor activity fell to 14% as high prices and borrowing costs continue to squeeze margins. Homes spent a median of 27 days on the market, unchanged from May but slightly longer than a year ago.

A Market Waiting on Rates

With 30-year fixed mortgage rates averaging around 6.75% in July, many would-be sellers are holding off, reluctant to give up the lower rates they locked in years ago. “High mortgage rates are keeping home sales at cyclical lows,” said Yun. “If rates dropped to 6%, our analysis suggests 160,000 renters could become first-time buyers.”

Inventory Slowly Builds, but Still Tight

Inventory remains tight by historical standards, though there are signs of easing. Total housing inventory reached 1.53 million units in June, up 15.9% from a year ago, representing a 4.7-month supply, still well below the six-month benchmark for a balanced market.

Looking Ahead

Despite the current slowdown, strong job growth and rising incomes could drive more market activity later this year, if mortgage rates ease.

Regional Sales Snapshot - South

1.81 million existing-home sales (-2.2% MoM, +1.7% YoY) Median Price: $374,500 (+0.3%)