Home sales in the Orlando area fell significantly in July as buyers faced the second-highest interest rates in the region in 20 years, a new housing report shows.

There were 2,852 sales in July, dropping by 8.7% from 3,124 in June, according to data from the Orlando Regional Realtor Association, which looks at sales from Orange, Osceola, Seminole and Lake counties. July’s sales were down 13.8% compared with last July.

July’s mortgage interest rate was 6.8%, up from 6.7% in June, and the second highest in Central Florida in 20 years, the association said in the report released last week. The rate hit 7% last October.

The median home price also fell for the first time this year, slipping slightly from $385,000 in June to $380,000 in July.

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Rising interest rates were called the biggest challenge for buyers by 43% of real estate agents surveyed by the association.

Another problem is there is a little more than two months of inventory on the market, when a healthy market would have six months, said Lisa Hill, Orlando Regional Realtor Association president.

Homeowners who bought their house in the last couple of years with interest rates at 2% or 3% are not moving because of the higher rates, meaning they’re locked into “golden handcuffs,” Hill said.

“A lot of buyers are just sitting and waiting to see if the interest rates are going to go down,” Hill said.

Hill said buyers should marry the house, but date the interest rates, which can then be refinanced.

First-time homebuyers are the ones being slowed down the most because of the rates, said Jeremy Wood, a real estate agent with Keller Williams Heritage Realty in Altamonte Springs.

Wood said he has four deals lined up for early September, representing two sellers and one seller who is then buying another home. But those clients all had their houses for about seven to 10 years and have massive equity in them, Wood said.

Hill agrees about first-time homebuyers, saying she started working with one earlier in the year, when rates were lower but they weren’t able to find the right home.

Now, the higher interest rates mean the buyer would have to look for a smaller home or one with fewer amenities compared with back when they first started searching.

Wood said his first-time homebuyer clients who weren’t able to buy because of interest rates are still working to get out of renting and the rent spikes that can come with it.

“The idea of home ownership is still very much the goal,” Wood said.