First-time buyers accounted for 29% of sales, down from 33% in June and slightly up from 28% a year ago. A 40% share in this category is needed for a robust housing market. The median number of days on the market for listed properties edged up to 29 from 28 in June and a year ago. Distressed sales, including foreclosures, were unchanged at 2%.
Residential investment, which includes homebuilding and sales, rebounded in the second quarter after declining for five straight quarters. Given the affordability challenges facing potential homeowners, however, economists saw the recovery as a blip.
But there was some encouraging news from the small business sector, where sentiment rose to an 11-month high in July amid a surge in the share of owners reporting plans to boost hiring. The rise in hiring plans suggested that last month's surprise drop in nonfarm payrolls was probably temporary.
The National Federation of Independent Business said its Small Business Optimism Index jumped 2.4 points to 99.8 last month, the highest level since August 2025 and surpassing its 52-year average of 98.0. The survey's employment index rebounded 1.9 points to 102.1 following four straight monthly declines.
The share of owners planning to create new jobs over the next three months jumped 9.0 points to 20%, the highest level since October 2022.
"This index, advanced by four months, has been a remarkably reliable leading indicator of the official estimates of private payrolls in recent years," said Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.
Those plans could, however, run into worker shortages. The share of owners reporting job openings they could not fill increased to the highest reading since June 2025. The unfilled positions were for both skilled and unskilled labor.
The government last week reported an unexpected decline in nonfarm payrolls in July, with big downward revisions to May and June's data. Some economists attributed the decline in payrolls to worker shortages. The labor force has decreased by more than a million this year amid retirements and an aggressive crackdown on illegal immigration by President Donald Trump's administration. Further declines are likely as hundreds of thousands of immigrants have lost their protected status.
From construction to agriculture, labor availability dominated comments from owners. Some said "finding or having qualified skilled labor applicants is nonexistent," while others said "the labor workforce is getting slim, and it seems like quality people are getting harder to find in labor fields."
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