U.S. Home Sales Defy Forecasts with 2% July Surge Despite Affordability Woes

• U.S. home sales rose 2% in July, exceeding analyst predictions.
• High prices and worsening affordability continue to challenge buyers, even amid rising inventory levels.

The U.S. housing market recorded an unexpected 2% increase in home sales in July, delivering a seasonally adjusted annual rate of 4.01 million units. Cryptopolitan on August 21, 2025, reported that analysts had anticipated a decline in sales, but a temporary dip in mortgage rates earlier this year played a significant role in driving this surprising trend.

Housing inventory increased substantially, marking a 15.7% year-over-year rise and reaching its highest level since May 2020. Despite this growth, the median price for homes sold in July climbed 0.2% from the previous year to $422,400, the highest ever recorded for the month. Elevated prices highlight the persistent affordability challenges facing many prospective buyers.

The housing market showed notable divergence between different price brackets. Sales of homes priced over $1 million surged by 7.1% year-over-year, while transactions for homes within the more affordable range of $100,000 to $250,000 slightly declined. These trends underscore the growing disparity in market accessibility—affordability challenges are particularly acute for first-time buyers, whose share of purchases shrank to 28% in July, down from 30% in June.

Investors and cash buyers are increasingly active in the housing market, taking advantage of elevated inventory levels. All-cash transactions accounted for 31% of home purchases, up from 27% a year ago, while investors contributed 20% of total sales, compared to 13% in July 2024. Meanwhile, the average time a property remains on the market extended from 24 days to 28 days year-over-year, signaling reduced urgency among sellers.

Affordability remains a critical issue, with only 28% of homes on the market accessible to the average household, according to recent assessments. While wage growth has reportedly outpaced the rise in home prices, elevated borrowing costs continue to constrain purchasing power. Cryptopolitan noted that homebuying activity has reached its lowest level since the mid-1990s due to the combined effects of high prices and interest rates.