U.S. home sales continued their downward trend in June, marking the fourth consecutive month of falling transactions, while the national median sales price reached a record $413,000, according to the National Association of Realtors. The cooling housing market reflects the impact of rising mortgage rates and persistent inflation on buyer affordability.
US Home Sales Fade in June; National Median Sales Price Hits Record High of $413,000
U.S. home sales weakened further in June as the national median sales price reached an unprecedented $413,000, according to a new report from the National Association of Realtors (NAR). This marks the fourth consecutive month of declining sales, indicating a significant cooling of the once-hot housing market amidst rising mortgage rates and ongoing inflationary pressures.
Existing home sales decreased by 5.4% in June compared to May, and were down a substantial 14.2% from June of last year. All four major regions in the U.S. experienced both month-over-month and year-over-year drops in sales. The combination of historically high home prices and increasing borrowing costs is significantly impacting buyer affordability, leading to a decrease in closed transactions.
Despite the slowdown in sales volume, the median existing-home price surged to a record $413,000 in June, a notable 13.4% increase from the median price recorded in June 2023. This dichotomy of falling sales and rising prices underscores the persistent issue of limited housing inventory across the country, which continues to exert upward pressure on prices even as buyer demand moderates.
The total inventory of unsold existing homes saw a slight increase to 1.26 million units, representing a 3.0-month supply at the current sales pace. This is up from the 2.6-month supply in May, but still remains relatively low by historical standards, suggesting that while the market is adjusting, it is not yet facing an oversupply of homes.
Economists and housing market analysts are closely monitoring these developments. The recent surge in mortgage rates, a direct consequence of the Federal Reserve’s efforts to combat inflation, is a primary factor contributing to the decline in buyer activity. While the pace of sales has slowed considerably, the record-high median price highlights the enduring imbalance between the supply of available homes and the underlying demand in many metropolitan areas.
Lawrence Yun, chief economist at the National Association of Realtors, commented on the report, stating that while the increase in inventory could eventually lead to a moderation in price growth, the current affordability challenges are likely to persist in the near term. The future trajectory of the housing market will heavily depend on the movement of mortgage rates, the ongoing trends in inflation, and the pace at which new housing construction can alleviate the supply shortage.
