Home sales have fallen to a new record low as affordability becomes harder for the average American in today’s economy.
Home sales for July fell 4.1% during a time where competition is slowing the housing market in places such as Texas and job insecurity begins to weaken demand nationwide.
According to real estate brokerage and online property marketplace Redfin, closed home sales fell 4.1% from June and pending sales declined 2.5% to their lowest point since December.
Why Are Home Sales Falling?
Home sales fall to new record low.
Redfin notes the median increase in home prices and mortgage rates are causing homes sales to fall.
For example, the median home-sale price rose 3.2% from a year earlier to $407,730, the highest July level on record.
The average 30-year fixed mortgage rate increased to a one-year high of 6.54% during the month as well.
This means that it only continues to get more difficult for first time homebuyers to reach this financial milestone.
“The housing market suffered from a mid-summer slump in July as would-be buyers grappled with record-high home prices, increasing mortgage rates, and growing financial insecurity,” said Chen Zhao, Redfin’s head of economics research.
“Many Americans simply can’t afford today’s housing costs, while others are holding off because they’re worried about the economy and/or their job security,” Zhao continued.
“The silver lining is that the buyers who can afford a home may be able to negotiate on price and get concessions from sellers who are eager to offload their house.”
Texas recorded three of the five largest annual declines in closed sales.
Home sales fell 12.6% in San Antonio, 10% in Dallas, and 9.9% in Fort Worth.
In Seattle, pending sales declined 15.6% annually, the steepest drop among the metros Redfin analyzed, while closed sales fell 9.1%.
The metro’s median sale price remained $809,479, nearly twice the national median.
Redfin also pointed to layoffs and uncertainty in the technology industry as reasons buyers are delaying purchases.
While unemployment has significantly come down compared to 2025, new hiring has been sluggish and Americans are still cautious about where the economy is headed.
“Seattle is a tech-driven market, and right now a lot of buyers are feeling cautious about layoffs, AI, and job security,” said Chase Costello, a Redfin Premier agent in the Seattle area.
“Tech workers aren’t moving between companies — or moving into the area — as much as they used to, and that means fewer people are trading up into new homes.”
Buyers are still in the market for homes, but the process of purchasing a home is simply taking longer due to these uncertainties.
Home Sales Decline As Gen Z and Millennials Choose Stocks Over Houses
Home sales are falling as Gen Z and Millennials choose stocks over houses.
Another not surprising reason for the drop in home sales is due to several Gen Z and Millennials choosing stocks over houses.
Much of this is due to the low cost-to-entry barrier in the stock market in contrast to buying a home.
Buying a home today requires a significantly higher down payment than decades ago thanks to soaring interest rates.
The truth is, buying a home scares most Gen Z and Millennials. Rising costs, maintenance, raising capital then the unload of significant cash, all attribute to this fear.
Fortune says, “Decades later, fulfilling the typical American Dream of a home with white picket fence dotting the front lawn has become all but unattainable, as home prices have soared 235% since January 2000.
As a result, many young people are going all in on the stock market, viewing their brokerage accounts as the new American Dream.”
Gen Z and Millennials still want to own homes; they’re just looking at stock investing as the engine boosters that will help them get there.
“For younger adults who despair about ever being able to buy a home, investing in financial markets can be a great way to save until they can afford one,” Chen Zhao, the head of economics research at Redfin, told Fortune.
For the first time, Americans aren’t buying homes at the age of 28 anymore. The age of the first-time homebuyer has jumped from 28 in 1992 to 40 in 2025.
While it’s going to take longer for Gen Z and Millennials to become first time homebuyers, buying a home is still seen as a good investment.
More than two thirds of Americans say buying a home is still an important asset as it holds value, appreciating over time.
Nearly a third of Gen Z adults (31%) say they’ve postponed buying a home because of financial pressure, and 34% worry they may never be able to afford one at all, according to Northwestern Mutual’s 2026 Planning & Progress Study.
And according to the Federal Reserve, a lot of the stock market now belongs to Americans under 40 since 1989.
Their combined holding has reached a whopping $3.09 trillion this year.
Pending Home Sales Begin Getting Cancelled
National Mortgage Professional says 14% of pending home-sale agreements were cancelled in July.
That’s up 0.7 percentage points from a year ago and 0.3 from the month prior in June.
What’s triggering pending home sales to get cancelled?
Additional costs such as inspections, repairs, appraisal worries and doubts, and overall finances all play a part in these rising cancellations.
New sellers are also pulling back a bit.
New listings declined 0.1% from June to their lowest level since October 2024.
Active listings also fell 0.3%, while the median time on market remained unchanged at 49 days.
Redfin said elevated mortgage rates continue to discourage homeowners from listing and giving up lower-rate loans.
And with how slow homes are selling, prospective sellers continue to sit on the sidelines.
Frank Nez is an American entrepreneur, journalist, writer, and investor. Frank's work has been cited by SEC and Congressional reports. Franknez.com is a personal finance and market news publication, dedicated to publishing content on money, investing, entrepreneurship, and retail investor news.
