• Sales of previously-owned homes made almost no progress in July, the National Association of Realtors said.
• Mortgage rates, while down fractionally compared to last week, are still higher than those on the home loans held by nearly 90% of all Americans.
• Many market observers expect rates to decline further as the Federal Reserve gets ready to cut benchmark interest rates.

There are glimmers of hope in the U.S. housing market, and ambitious buyers might finally find what they’re looking for in coming months, according to reports released Thursday.

To be sure, the reports look pretty grim. Sales of previously-owned homes made almost no progress, the National Association of Realtors said, gaining only 1.3% in July and stuck around levels last seen in the depths of the recession caused by the subprime crisis. And mortgage rates, while down fractionally compared to last week, are still higher than those on the home loans held by nearly 90% of all Americans.

But both readings are going in the right direction, said Danielle Hale, chief economist for Realtor.com

“It’s nice to see an improvement in the existing-home sales,” Hale said.

In particular, Hale was heartened by the growth in inventory of homes for sale. It’s a still-low 1.3 million units, down nearly one-third compared to what was on the market in the years before the pandemic. Still, that represents a 20% jump in homes compared to a year ago. And with fewer sales taking place, that means there’s 4 months’ worth of supply for house hunters, not far off the long-time normal.

Learn more: Best personal loans

“Sales might pick up if mortgage rates continue to drop,” Hale told USA Today. “For right now, the housing market is more balanced than it has been and it should mean that conditions are better in the market for both buyers and sellers.”

Rates did take another step down this past week, Freddie Mac said on Thursday. The 30-year fixed-rate mortgage averaged 6.46%, meaning that a mortgage payment for a home at the national median price of $422,600 would be $2,128. That’s down a bit from $2,302 a year ago, when the popular mortgage products were at 7.23%.

But Freddie’s chief economist, Sam Khater, thinks rates need to go even lower to get would-be buyers off the sidelines.

“Earlier this month, rates plunged and are now lingering just under 6.5%, which has not been enough to motivate potential homebuyers,” Khater said in a release. “We expect rates likely will need to decline another percentage point to generate buyer demand.”

More info:Current mortgage rates

Many market observers expect rates to decline further as the Federal Reserve gets ready to cut benchmark interest rates, possibly as soon as its September meeting.

Meanwhile, fall brings less competition for buyers who have the flexibility to shop outside of the more traditional “spring selling season,” Realtor.com’s Hale said.

Right now, there’s more variation in the national housing market than has been the case over the past few years, Hale said. That means buyers who can also be flexible on things like location and home condition may be able to find bargains.

Your wallet, explained. Sign up for USA TODAY's Daily Money newsletter.