The latest Existing Home Sales report shows July closings declined 1.7%, bringing the annualized pace to approximately 4.06 million homes, just slightly above the 4.05 million expected.

While sales are lower than we would like to see, the bigger story may be just how stable the housing market has remained despite elevated mortgage rates.

It continues to come down to the basic economics of supply and demand.

Inventory actually fell 2% last month to 1.54 million homes, and is down about 0.6% from a year ago. That’s still a relatively tight supply of homes, especially when you remember that just a few years ago inventory was closer to 1 million homes.

Homes are also spending an average of about 29 days on the market, showing that buyers are still active when the right property comes along.

Some other interesting numbers:

• Cash buyers: 26%, down from 31% last year
• Investors: 15%, down from 20% last year
• First-time buyers: 35%
• Home values: Up approximately 1.5% year-to-date

The takeaway? Higher rates have slowed the housing market, but they haven’t broken it. Buyers are still buying, sellers are still selling, and limited inventory continues to provide support for home values.

If mortgage rates begin to move lower, the big question becomes: What happens when all those buyers who have been sitting on the sidelines decide it’s time to jump back in?

That could be a very different housing market.

If you’re thinking about buying or refinancing, now is the time to get prepared, not necessarily to wait for the perfect rate.

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