Existing home sales in the United States dropped to a three-month low in July, as high home prices and elevated mortgage rates continue to weigh on the housing market.

According to data released Tuesday by the National Association of Realtors (NAR), existing home sales fell 1.7% in July to a seasonally adjusted annual rate of 4.06 million units. This figure matched the median estimate in a Bloomberg survey of economists.

The weak sales data reflects a persistently sluggish housing market. High home prices and rising borrowing costs this year have kept many potential buyers on the sidelines. Since the end of 2022, existing home sales have hovered near the 4 million annualized mark, awaiting a catalyst for a sustained recovery.

"Despite rising mortgage rates over the past few months, home sales have remained surprisingly stable," said Lawrence Yun, NAR's chief economist, in a statement. He added, "Undoubtedly, if the average mortgage rate were to fall back to near 6%, the housing market would become very active."

In recent months, both housing financing costs and price trends have been unfavorable for buyers. Since the end of February, the 30-year fixed mortgage rate has been climbing, recently reaching a one-year high of 6.81%.

The median existing-home sales price rose 2% year-over-year in July to $434,100, the highest for any July on record, extending the price appreciation trend that began in the summer of 2023.