Existing home sales fell 3.3% in June to a saar of 4.16mn, a touch below our estimate of 4.20mn, which was the same as the consensus forecast.

Sales were mixed across regions. Sales for prior months were unrevised.

Oxford Economics' analysts expect home sales to soften over the balance of the year as the economy enters a recession and labor markets weaken.

"Affordability challenges also remain, with home prices elevated and mortgage rates near 7%, although some of the recent back up in mortgage rates will likely be reversed given the decline in Treasury yields since last week's better than expected inflation data," analysts said.

More restrictive lending standards may weigh on sales at the margin, although standards for residential mortgages have tightened by less than for other types of loans.

"We think that resilient demand will keep sales from falling too sharply, however, with buyers likely to respond to any renewed decline in mortgage rates."