Home sales are locked in a four-year holding pattern. An easing of tensions abroad could help bring buyers back domestically.

For home sales to pick up, mortgage rates need to fall, the National Association of Realtors' chief economist said Tuesday. For mortgage rates to fall, oil prices need to move lower. And for oil prices to move lower, geopolitical tensions related to the war in Iran need to ease.

Previously owned homes changed hands at a seasonally adjusted annual rate of 4.06 million in July, according to National Association of Realtors data released Tuesday. That's down from 4.13 million in June, but slightly above the year-ago level and roughly in line with the FactSet consensus estimate of 4.05 million. The median home sold for $434,100, a 2% increase from one year prior.

It's another month of underwhelming home sales data in a multiyear stretch full of it. In the decade before the pandemic, annual sales averaged about 5 million homes, according to National Association of Realtors data. Sales surged in 2020 and 2021, but monthly sales rates have been lodged below 5 million since mortgage rates began to rise in mid-2022.

All the while, the long-awaited housing market rebound has failed to materialize. Sales in the first seven months of this year are modestly higher than last year's levels, the trade group reported -- which means, at the very least, there's a chance that home sales in 2026 won't mark the lowest annual total since 1995 for a fourth straight year.

If mortgage rates, recently at 6.76% according to Mortgage News Daily, could fall back to the levels they logged in the first quarter of the year, home sales could have room to pick up, National Association of Realtors chief economist Lawrence Yun said during a press conference. "If [the 30-year fixed mortgage rate] was to somehow get back to 6%, I think we would see much more robust activity," he said.

To get there, inflationary pressures need to ease, Yun says. "If oil prices were to somehow retreat back down, the 10-year Treasury would retreat, and the mortgage rate would also go down from less inflationary pressure," he says.

And for oil prices to fall, tensions in the Gulf would need to ease. Treasury yields -- including the 10-year Treasury yields that chart the course for mortgage rates -- have risen recently as an agreement between the U.S. and Iran has remained out of reach, Barron's previously reported.

Mortgage rates could move lower if a lasting deal pushes oil prices and Treasury yields down. Until then, rates hovering around 6.75% are likely to keep home sales stuck in their holding pattern. "In the current environment, it seems like it's really the oil prices," said Yun.