The housing market showed signs of life in July, with sales of existing homes increasing 2% from June and 0.8% year over year to a seasonally adjusted annual rate of 4.01 million units, according to the latest data from the National Association of Realtors (NAR).

The uptick in homebuying activity represents a rebound from June, when existing home sales fell 2.7% month over month.

“The ever-so-slight improvement in housing affordability is inching up home sales,” NAR Chief Economist Lawrence Yun observed in a press release. “Wage growth is now comfortably outpacing home price growth, and buyers have more choices.”

Those choices totaled 1.55 million homes last month, with total housing inventory increasing 0.6% from June and 15.7% from July 2024.

Noting that current inventory is at its highest level since May 2020, early in the COVID-19 lockdown, Yun believes “homebuyers are in the best position in more than five years to find the right home and negotiate for a better price.”

Wells Fargo economists Charlie Dougherty, Jackie Benson and Ali Hajibeigi have a less rosy outlook, writing in an analysis that “the housing market is stuck in stasis.”

“Although the bounce-back from June’s decline was an encouraging sign that activity is not declining sharply, the trend in sales has essentially moved sideways this year as affordability conditions remain challenging and the macroeconomic backdrop weakens,” they wrote.

The Wells Fargo team called July’s 4.01 million annualized sales pace “tepid by historical standards” and said elevated mortgage rates continue to suppress demand.

NAR data show sales of existing homes accelerated by 8.7% in the Northeast last month, 2.2% in the South region and 1.4% in the West. Sales declined 1.1% in the Midwest region.

The median existing-home price stood at $422,400 in July, which is up just 0.2% from the prior year’s mark of $421,400.

“Near-zero growth in home prices suggests that roughly half the country is experiencing price reductions,” Yun stated.