US Existing Home Sales Fall as Record Prices Weigh on Buyers
Synopsis
Higher mortgage rates and record home prices pushed existing home sales lower in June, highlighting persistent affordability challenges across the US housing market.
US existing home sales fall record prices remained the dominant story in the housing market during June after transactions unexpectedly slowed even as more homes became available for sale.
The seasonally adjusted annual rate of existing-home sales fell 2.4% from May to 4.09 million, missing economists' expectations, according to the National Association of Realtors (NAR) Existing-Home Sales Report. However, sales were also 2.8% up on the same time last year, suggesting that activity is still above 2025 despite a drop in affordability.
The report also revealed that the median existing-home price hit a new record level of US$440,600, which is 1.8% higher than a year ago. The 12-month price increase for June was the 36th consecutive month of annual price increases as housing supply remained limited and demand remained strong.
Inventory Improves but Affordability Remains a Challenge
Housing supply remained on the recovery path too, with 1.56 million existing dwellings available at the end of June, which is 15.9% more than a year ago. Despite this, inventories were still below the five to six months considered a balanced market by economists, at 4.6 months.
Housing loan rates were also high. Freddie Mac data revealed that the average 30-year fixed mortgage rate remained elevated as compared to pre-geopolitical-tension rates, which meant that borrowing costs were high for a lot of homeowners and kept many of them from placing their homes on the market for which they had lower-rate mortgages.
Over the past few years, the housing market has also been facing a shortage of approximately 1.2 million homes, especially entry level, which will hinder first time homebuyers. In June, they made up 33 percent of purchases, compared with 40 percent, which is considered healthy for the housing market by economists.
Housing Pressures Echo Across Other Markets
The June data follows a trend of affordability being a widespread issue in developed housing markets, including Australia, where record interest rates and the shortage of housing have driven home values up. Market conditions vary, but both countries still have supply shortages which have made it less affordable for many buyers.
Regional results varied throughout the United States. Sales were higher in the Northeast and all other regions of the country posted monthly declines in existing-home sales. Typically, homes stayed on the market for 27 days, up from 22 days one year ago, indicating that buyers are delaying transactions.
Initial jobless claims dropped to 215,000 in the same week, reflecting continued modest layoffs, separate data from the U.S. Department of Labor released on Thursday showed.
Despite the recent price increases, stable employment has maintained solid underlying demand and the pace of sales looks to have been influenced by high borrowing costs.
Source: Reuters
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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