Existing-home sales in June were at a seasonally adjusted annual rate of 3.93 million, a decrease of 2.7% compared with May and flat compared with June 2024, according to the National Association of Realtors (NAR).
Home sales remain sluggish due to high mortgage rates that have been stuck in the 6.7%-6.9% range and lack of inventory that is keeping home prices high in many areas.
Nationally, inventory of existing homes for sale decreased 0.6% in June to 1.53 million units. That’s about a 4.7-month supply, NAR says.
“Multiple years of undersupply are driving the record high home price,” says Lawrence Yun, chief economist for NAR, in a statement. “Home construction continues to lag population growth. This is holding back first-time home buyers from entering the market. More supply is needed to increase the share of first-time homebuyers in the coming years even though some markets appear to have a temporary oversupply at the moment.”
“High mortgage rates are causing home sales to remain stuck at cyclical lows,” Yun says. “If the average mortgage rates were to decline to 6 percent, our scenario analysis suggests an additional 160,000 renters becoming first-time homeowners and elevated sales activity from existing homeowners.”
”Expanding participation in the housing market will increase the mobility of the workforce and drive economic growth,” Yun adds. “If mortgage rates decrease in the second half of this year, expect home sales to increase across the country due to strong income growth, healthy inventory, and a record-high number of jobs.”
Although home price growth has slowed, home prices nonetheless hit a new high in June, increasing 2% compared with June 2024: The average home price nationally in June was $435,300, up from $426,900 a year ago.
June marked the 24th consecutive month of year-over-year home price increases, NAR says.
Regionally, and month-over-month, existing-home sales decreased 8% in the Northeast, 4% in the Midwest and 2.2% in the South, but were up 1.4% in the West.
Photo: Scott Webb