Mortgage rates at 6.69% are not high. Inflation is high.

By Wolf Richter for WOLF STREET.

Sales of existing single-family homes fell by 1.9% in July from June, seasonally adjusted, the second month in a row of declines, to an annual rate of 3.69 million sales, sinking deeper into the mud at the bottom that sales have been in for four years, according to data by the National Association of Realtors today.

Compared to July in prior years:

• 2025: +0.8% (year-over-year)
• 2024: +2.5%
• 2023: +1.9%
• 2022: -15.4%
• 2021: -30.6%
• 2019: -23.3%
• 2015: -24.1%
• 2009: -5.1% (Housing Bust)
• 1996: -3.7%

Supply of single-family homes rose to 4.6 months in July, the highest since the summer of 2016.

Supply is a function of inventory and sales – how much inventory there was at month-end in relationship to sales during the month. Sales sank deeper into the mud at the bottom, while inventories rose to 1.4 million single-family homes for sale.

Sales of condos and co-ops were unchanged (seasonally adjusted and rounded to the nearest 10,000) in July, at an annual rate of 370,000, just above the record low in the data that go back only to late 2011.

The seasonally adjusted annual rate compared to July in prior years:

• 2025: 0% (year-over-year)
• 2021: -47.9%
• 2019: -36.2%
• 2012: -27.5% (first June in the data series)

Supply of condos rose to 6.6 months, along with May, June, and September 2025, the highest since 2012.

Sales by region.

Sales of existing homes (single-family, condos, and co-ops combined) fell month-to-month in the South (-3.1%), the second month in a row of declines, and the Midwest (-2.0%), also the second month in a row of declines, seasonally adjusted. Sales were unchanged in the West and rose in the Northeast (+2.0%).

Compared to the same month in 2019, sales were down: in the West (-37%), Northeast (-27%), Midwest (-24%), and South (-19%). A map of the four regions is below the article at the top of the comments.

In the South, the seasonally adjusted annual rate of sales fell 3.1% in July from June, the second month in a row of declines, to 1,860,000 homes.

Compared to July in prior years:

• 2025: 0% (year-over-year)
• 2024: +2.8%
• 2023: 0%
• 2022: -14.3%
• 2019: -19.1%
• 2018: -17.3%

In the West, the seasonally adjusted annual rate of sales was unchanged in July at 730,000 homes.

Compared to July in prior years:

• 2025: +1.4% (year-over-year)
• 2024: -2.7%
• 2023: -1.4%
• 2022: -17.0%
• 2019: -36.5%
• 2018: -38.7%

In the Midwest, the seasonally adjusted annual rate of sales fell 2.0% in July, to 970,000 homes.

Compared to July in prior years:

• 2025: +2.1% (year-over-year)
• 2024: +4.3%
• 2023: 0%
• 2022: -19.2%
• 2019: -23.6%
• 2018: -23.6%

In the Northeast, the seasonally adjusted annual rate of sales rose by 2.0%, to 500,000 homes.

Compared to July in prior years:

• 2025: 0% (year-over-year)
• 2024: +2.0%
• 2023: +4.2%
• 2022: -20.6%
• 2019: -26.5%
• 2018: -27.5%

Mortgage rates are not high; inflation is high.

The average 30-year fixed mortgage rate rose to 6.69%, according to Freddie Mac’s weekly measure last Wednesday.

Mortgage rates track the 10-year Treasury yield (4.69% at the moment), but are higher, and the spread between them varies. Inflation has been running hot, amid fears that it’s not going back into the bottle, which is one of the reasons the 10-year Treasury yield is at 4.69%.

Current mortgage rates are at the lower end of the spectrum before the Fed’s QE started in 2009, which involved purchases of trillions of dollars of mortgage-backed securities to suppress mortgage rates and inflate home prices.

Mega-QE during the pandemic triggered the below-3% mortgage rates while inflation was spiking in direction of 9%, resulting in mortgage rates that were deeply negative in “real” terms (adjusted for inflation). That and FOMO by homebuyers trying to take advantage of those mortgage rates were the main culprits in the explosion of home prices from mid-2020 to mid-2022. The Fed’s money-printing strategy ended up creating the current “affordability crisis” and lots of inflation.

We’ve been saying this for years: The housing market – buyers, sellers, and everyone in between – needs to get used to these mortgage rates.

National price, local price, inflation & wage increases.

The national median price of single-family homes inched up year-over-year by 1.9% in July, not seasonally adjusted. Month-to-month, it declined to $440,300.

Since late 2022, broad inflation and national wage increases have outrun the increases of the national median price of single-family homes, thereby easing very slowly, over many years, the affordability crisis that was caused by the 40% explosion of the national median price in the two years through mid-2022 that had come on top of already high prices.

The price explosion ended in June 2022. Over the four years since then:

• National median price of single-family homes: +4.6% through July.
• Consumer Price Index (CPI): +13.2% through June.
• Average hourly earnings: +16.9% through July.

But the national median price is irrelevant for people buying or selling a home. To them, what matters are local prices, so…

Single-family home prices have dropped by 10% to 26% in 15 bigger markets, including:

• Austin, TX: -26%
• Oakland, CA: -25%
• New Orleans, LA: -20%
• Sarasota County, FL: -17%

In some other bigger cities, prices of single-family homes have continued to rise to new highs; the biggest year-over-year gains in those cities were in:

• New York City: +4.1%
• Chicago: +4.4%
• Milwaukee: +3.6%.

The national median price of condos and co-ops rose year-over-year by 2.2%.

On a local basis,  condo prices have plunged by 15% to 33% in 30 bigger markets from their highs, with several markets dropping below their highs in 2006. From peak:

• Cape Coral, FL: -33%
• Oakland, CA: -32%
• Petersburg, Fl: -29%
• Austin, TX: -28%
• Fort Myers, FL: -27%
• Sarasota County, FL: -24%
• Garland, TX: -21%
• Tampa, FL: -21%.

Here is Oakland, for example. The national median condo price really doesn’t matter to condo buyers and sellers anywhere (all 30 charts are here):

In case you missed it: Another Hit to Demand in the Housing Market: Purchases by Foreign Buyers Have Plunged by 76% from Peak.

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