Home sales slipped again in July as rising mortgage rates discouraged buyers

Home sales declined for the second straight month in July as rising mortgage rates and high prices discouraged buyers. Sales of existing homes slid 1.7% in July from a month earlier to a seasonally adjusted annual rate of 4.06 million, according to National Association of Realtors data released on Tuesday. Economists had been expecting a smaller 1% decline. The drop is the latest sign that the housing market remains essentially frozen due to limited affordability. Mortgage rates rose from 6.43% to 6.66% over the course of July, while home prices were up 2% from a year ago to a median of $434,100. In one bright spot, home sales saw a small 0.7% jump from a year ago, driven by more activity in the Midwest and the West, and sales in the first seven months of the year are up 2.4% year over year. But the second half of the year has the potential to underwhelm. Homebuying and selling activity is typically the strongest in the spring months, and last week, Zillow said that July may represent a market peak as buyers become discouraged by the highest mortgage rates in more than a year. "Just in terms of economic capacity, mortgage rates at 6% have a huge impact on how many people can buy versus the current mortgage rate of around 6.7%," NAR chief economist Lawrence Yun said. Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance. View Comments