Sales of previously owned homes dropped 2.6% in July as U.S. mortgage rates increased.

However, even with the decline sales came in at the third-highest level on record.

The National Association of Realtors said Tuesday that home resales fell to a 7.16 million annual rate last month from June’s revised 7.35 million annual pace. June sales were originally seen at a rate of 7.33 million.

NAR chief economist David Lereah said “This is a big number any way you slice it, and housing is continuing to stimulate the overall economy.”

The median sales price — where half sold for more and half sold for less — of an existing home was $218,000 in July, up 14.1% from a year ago.

In July, the inventory of homes available for sale rose. The inventory of homes on the market rose to 4.6 months last month, compared with June’s revised 4.4 months.

The overall drop in sales of previously owned homes came as mortgage rates rose. The average rate on a 30-year fixed mortgage in July was 5.70%, up from 5.58% in June.