SEATTLE — U.S. home sales jumped 7% in July from a year earlier, their strongest annual increase of 2026, but weakening pending sales and rising mortgage rates could make that gain difficult to sustain through the remainder of the year, according to Zillow.
An estimated 382,898 homes were sold in July, up 7% from July 2025 but down 2.7% from June, according to Zillow’s July Market Report. The sales estimate is preliminary and will be revised later this month.
The stronger closings largely reflect purchase contracts signed several weeks earlier, when mortgage rates were around 6.5%, Zillow said. An oil price shock in July subsequently pushed mortgage rates higher, potentially causing some prospective buyers to put their home searches on hold.
Newly pending listings provide evidence of that slowdown. They increased just 0.3% from a year earlier and fell 7.7% from June.
‘Unfortunate’ Peak?
“July was a strong month for existing home sales, but unfortunately it may represent the peak of what we can expect for the rest of the year,” Zillow Chief Economist Mischa Fisher said.
Fisher said July closings primarily reflected offers accepted in June, when pent-up housing demand combined with improving mortgage rates to increase activity.
“Unfortunately, the weak growth in newly pending sales in July and the worsening rate environment portend a weaker half of the year for sales growth, with flat to declining transaction volumes for the remainder of the year in some regions,” he said.
Home Values Continue to Rise
The typical U.S. home was valued at $371,757 in July, according to the Zillow Home Value Index.
Home values increased 0.4% from June and 1.1% from a year earlier.
Despite that increase, the estimated monthly mortgage payment on a typical U.S. home was $1,888 in July, assuming a 20% down payment and excluding taxes and insurance. That was 0.9% lower than a year earlier, reflecting the mortgage-rate environment at the time.
Zillow warned that affordability could deteriorate again. Unless mortgage rates reverse their recent increase, rates will be higher this August than they were a year earlier, which could push the typical mortgage payment above year-ago levels.
More Homes Hit the Market
Among the data points released by Zillow:
- There were 1.41 million homes for sale nationwide in July, up 1.5% from a year earlier and 0.9% from June, Zillow reported.
- New listings totaled 387,203, an increase of 3.1% from a year earlier but a 4.2% decline from June.
- Homes took a median of 25 days to go under contract, five days longer than a year earlier and one day longer than in June.
- Price reductions also remained common. About 27.1% of listings had a price cut in July, up from 25.7% in June but slightly below the 27.4% recorded a year earlier.
- Among homes sold in June, the latest month for which data were available, 30.8% sold for more than their listing price. That compared with 30.9% a year earlier.
Rents Rise 2.3%
The typical U.S. rent reached $1,962 in July, according to the Zillow Observed Rent Index. Rents increased 2.3% from a year earlier and 0.3% from June.
Renters also continued to encounter widespread incentives from landlords. Zillow said 39.8% of rental listings offered a concession in July, up from 36% a year earlier and 39.7% in June.
