On the year, sales were up 2.1%, but were at their lowest so far in 2017.
Lawrence Yun, NAR chief economist, says the second half of the year got off on a somewhat sour note as existing sales in July inched backward. "Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month".
"One year ago, I thought it was a very tight condition, but the housing shortage has intensified", Mr. Yun said.
Analysts say the current economic recovery, which has seen more than 80 months of uninterrupted job creation, has driven up demand, with a new generation of millennials ready to move into their first homes.
The median sales price in July hit $258,300 up 6.2% from a year earlier, NAR said. The sales pace is still up 2.1% from July of previous year.
The lack of homes on the market is also causing properties to sell more quickly.
Properties typically stayed on the market for 30 days in July, which is up from 28 days in June but down from 36 days a year ago.
Unsold inventory has now fallen year-over-year for 26 consecutive months.
"This speaks to the significant pent-up demand for buying rather than any perceived loss of interest", Yun said. NAR's 2016 Profile of Home Buyers and Sellers - released in late 2016 - revealed that the annual share of first-time buyers was 35 percent.
California and New England are where homeowners have remained the longest before selling. "When (potential buyers) find something, they compete pretty hard for it".
Harvey still not a tropical storm but on a path for Texas
A tropical wave is expected to bring heavy rains, wind and possible flooding to South Florida starting Tuesday, forecasters said. Blood said the latest track projected the storm would make landfall in Matagorda, but cautioned Harvey's path is unpredictable.
The average 30-year fixed rate mortgage charged 3.86 percent this week, according to mortgage buyer Freddie Mac.
Sales were up 3.2 percent in July in Lake County, to 609.
Supply was down 9.0 per cent from a year ago.
Sales declined 1.3% to a seasonally-adjusted annual rate of 5.44m from a downwardly-revised 5.51m in June. Four percent of July sales were foreclosures and 1 percent were short sales.
Median price: $373,000, a 7.6 percent year-over-year increase.
Across the regions, the Northeast saw a decline of 14.5 per cent and in the Midwest sales were down 5.3 per cent.
Median price: $290,000, a 4.1 percent year-over-year increase. But buying picked up 2.2 percent in the South and 5 percent in the West.
Median price: $205,000, a 5.9 percent year-over-year increase.
Existing-home sales in the West jumped to an annual rate of 1.26 million up 5.0% on both a month-over-month and annual basis. The median price in the South was $227,700, up 6.7 percent from a year ago.
The association pegged sales of existing homes last month at 5.44 million. As a result, single-family home prices rose 6.1% y/y in the three months to July, so implied real mortgage rates are well below zero.