Home Sales on the Rise, but Momentum May Be Fading

Home sales rose 7% in July, the strongest annual gain seen so far this year, according to the Zillow July Market Report. Looks can be deceiving, however.

A closer look takes some air out of that headline figure, Zillow noted.

Newly pending listings are up just 0.3% year over year, Zillow said, suggesting July may represent the peak of what we can expect for the rest of 2026.

According to Zillow, July’s sales figure reflects contracts signed weeks earlier, when underlying pent-up demand for housing, combined with an improving rate environment, drove strong activity.

Zillow said, however, that a fresh oil price shock in July sent mortgage rates higher, likely prompting many home shoppers to pause their searches.

The affordability edge that has been a silver lining to an otherwise disappointing home shopping season may disappear in the coming months, Zillow noted.

Home Values Up

It said that U.S. home values are up 1.1% from a year ago, citing the Zillow Home Value Index. A monthly mortgage payment on the typical U.S. home in July, assuming a 20% down payment, was 0.9% lower than the year prior, the online brokerage noted. Unless they reverse course, mortgage rates will be higher than last year in August, likely enough to push the typical mortgage payment above year-ago levels, Zillow said.

That portends a weaker half of the year for sales growth, with flat to declining transaction volumes for the remainder of the year in some regions, according to Zillow.

According to Zillow, the typical U.S. home value is $371,757.

The Zillow Home Value Index (ZHVI) was up 0.4% month over month in July and home values are 1.1% higher than a year earlier.

The monthly mortgage payment on a typical U.S. home is $1,888, assuming a 20% down payment and excluding taxes and insurance. That is 0.9% lower than last year.
Inventory

There were 1.41 million homes for sale nationwide in July, Zillow said.

Active Inventory Up

Active inventory was 1.5% higher than a year earlier. Inventory rose 0.9% from June.
New for-sale listings totaled 387,203 in July, up 3.1% from a year earlier and down 4.2% from June.

Zillow noted that 382,898 homes were sold in July, according to its preliminary sales count nowcast. That is 7% higher than a year earlier but down 2.7% from June. These figures will be revised mid-month.

Newly pending listings, which measures listings that changed from for-sale to pending status rather than closed sales, shows 0.3% growth from a year earlier and a 7.7% decrease from June.

Zillow noted that homes took a median of 25 days to go pending in July. That was five days longer than a year earlier and one day longer than June.

The brokerage noted that the share of listings with a price cut in July was 27.1%. That was down from 27.4% a year earlier and up from 25.7% in June. It said that 30.8% of homes sold above list price in June, the most recent data available.

That’s compared to 30.9% a year earlier and 30.2% in May.

The typical rent nationwide is $1,962, according to the Zillow Observed Rent Index. which is 2.3% higher than a year earlier and up 0.3% from June. Zillow said that 39.8% of rental listings on Zillow offered a concession in July. That’s up from 36% a year earlier and up from 39.7% in June.