Navigating the Current Housing Market: Stability, Shifting Rates, and What It Means for You

Welcome to your CMRE market update! The housing landscape continues to be a dynamic arena, shaped by evolving mortgage rates, resilient buyer demand, and constrained inventory. Let's dive into the latest trends and what they mean for you.

Existing Home Sales Show Remarkable Stability

Despite elevated mortgage rates, the existing-home sales market demonstrated surprising stability in July 2026. According to the National Association of REALTORS® (NAR), sales eased slightly by 1.7% from June to a seasonally adjusted annual rate of 4.06 million. However, this figure still stands 0.7% higher than July 2025, with year-to-date sales up a healthy 2.4%.

NAR Chief Economist Lawrence Yun noted the market's steadfastness, suggesting that activity could strengthen further if average mortgage rates recede closer to 6%. This sentiment highlights the delicate balance between rate fluctuations and buyer confidence.

While sales held steady, housing inventory continued its downward trend, falling to 1.54 million units – a 1.9% drop from June and 0.6% lower than a year prior. This represents a 4.6-month supply, indicating a tight market that favors sellers. This limited supply, coupled with persistent demand, continues to underpin home prices.

The median existing-home price climbed to $434,100 in July 2026, marking a 2.0% increase from July 2025. This is the 37th consecutive month of year-over-year price appreciation, underscoring the long-term value of real estate.

Encouragingly, affordability saw a notable improvement, with the Housing Affordability Index rising to 103.3 from 98.3 in July 2025. While this improvement should support demand, the ongoing decline in inventory remains a key constraint for buyers.

Mortgage Rates and Application Activity: A Rollercoaster Week

The mortgage market has been a tale of two weeks, illustrating just how quickly sentiment and activity can shift with rates. For the week ending July 31, 2026, mortgage application volume decreased by 2.9% on a seasonally adjusted basis, as the average contract rate for a 30-year fixed mortgage climbed to 6.81%—its highest level in over a year.

However, a moderate decline in borrowing costs brought a welcome reprieve. For the week ending August 7, 2026, total mortgage application activity rebounded by 3.6% on a seasonally adjusted basis. This surge was directly correlated with the 30-year fixed mortgage rate dropping to 6.77% from 6.81% the previous week.

Both purchase and refinance applications benefited from this rate reversal. Purchase applications increased by 3% from the previous week, although they remained 1% below year-ago levels. Refinance activity saw a 5% bump, with its share of total applications rising to 40.7% from 39.9%.

Joel Kan, MBA’s Vice President and Deputy Chief Economist, highlighted that while this reprieve supported an increase in applications, the overall pace remains below last year’s. This signals that while buyers and homeowners are sensitive to rate changes, elevated costs continue to influence their decisions.

What This Means for You

The current market reflects a delicate balance: robust demand meets limited supply, all influenced by fluctuating mortgage rates. For buyers, this means remaining agile and prepared. An improving affordability index is a positive, but tight inventory demands swift action when the right home appears. Monitor rates closely, as even small dips can create opportunities.

For sellers, the market remains strong, with rising prices and consistent demand. Strategic pricing and presentation are key to maximizing your return.

At CMRE, we understand that navigating this landscape requires expert guidance. Whether you're considering a purchase, a refinance, or simply want to understand your options, our team is here to help you make informed decisions in today's dynamic real estate and mortgage environment.