Three separate housing data releases this week all point in the same direction: Buyer demand cooled in late July as mortgage rates climbed to their highest level in roughly a year.
Mortgage applications, refinance activity, pending home sales and newly pending listings all fell in a combination of new reports from Zillow, Redfin and the Mortgage Bankers Association.
Meanwhile, mortgage rates and home prices were both up. Existing home sales rose in July, but when combined with the forward-looking data, the reports provide a bleak outlook for real estate sales activity for the remaining five months of the year.
“July was a strong month for existing home sales,” said Mischa Fisher, chief economist at Zillow, “but unfortunately it may represent the peak of what we can expect for the rest of the year.”
Mischa Fisher | Zillow
The Mortgage Bankers Association reported Aug. 5 that mortgage applications fell 2.9 percent from the prior week on a seasonally adjusted basis for the week ending July 31.
The seasonally adjusted purchase index fell 4 percent week over week, and the unadjusted purchase index was 3 percent lower than the same week a year earlier. Refinance applications fell 2 percent for the week and were 9 percent below levels a year ago.
The average contract rate on a 30-year fixed mortgage with a conforming loan balance rose to 6.81 percent from 6.76 percent, according to MBA.
Mike Fratantoni, MBA’s senior vice president and chief economist, attributed the pullback to rates reaching their highest level in more than a year following the July FOMC meeting, saying that higher mortgage rates have weakened overall demand.
Mike Fratantoni | Mortgage Bankers Association
Redfin’s weekly housing market update, published on Thursday, showed the effect on contracts.
Pending home sales fell 3.7 percent week over week — the steepest weekly decline since 2022 — to a seasonally adjusted 311,150 for the four weeks ending Aug. 2. That’s 1.9 percent below levels a year ago and the lowest level in more than five months.
Redfin’s leading indicators show the rate backdrop behind that decline. Mortgage News Daily’s daily average 30-year fixed rate stood at 6.82 percent on Aug. 3, up from 6.57 percent a year earlier. Google searches for “homes for sale” were down about 3 percent from a month earlier as of Aug. 2 and 6 percent year over year, Redfin reported.
ShowingTime touring activity was up 12 percent from the start of the year as of July 26, compared with a 29 percent gain at the same point in 2025.
Supply-side metrics in the Redfin data held roughly flat. New listings rose 1 percent week over week to a seasonally adjusted 354,313, up 0.2 percent year over year. Active listings fell 1.5 percent for the week to 1,468,943, down 0.3 percent from a year ago. Months of supply was unchanged at 3.6. The median sale price was $406,362, up 2.9 percent, and the median monthly mortgage payment was $2,631, up 0.6 percent.
Zillow’s July Market Report, also released on Thursday, showed that home sales rose 7 percent year over year in July, the strongest annual gain of the year, with 382,898 homes sold according to Zillow’s preliminary sales count. That’s down 2.7 percent from June.
Zillow said that figure largely reflects transactions where an offer was accepted in June.
Newly pending listings, which Zillow describes as a leading indicator of future closings, grew 0.3 percent year over year and fell 7.7 percent from June. Zillow attributed the July rate increase to a fresh oil price shock.
Fisher said in a statement that July may represent the peak of what we can expect for the rest of the year, citing weak newly pending growth and the rate environment. He pointed to flat-to-declining transaction volumes in some regions through the end of the year.
Zillow put the typical U.S. home value at $371,757, up 1.1 percent year over year, with a typical monthly mortgage payment of $1,888, 0.9 percent below last year.
Zillow said that the affordability edge may disappear if rates don’t reverse, pushing the typical payment above year-ago levels in August. Inventory stood at 1.41 million, up 1.5 percent year over year, extending a 32-month streak of supply gains. Homes took a median 25 days to go pending, five days longer than a year earlier.
