Existing Home Sales Decline in June Amid Record High Prices

Existing-home sales decreased by 2.4% in June compared to May, reaching a seasonally adjusted annual rate of 4.09 million units, according to a report released Thursday by the National Association of Realtors (NAR). Despite the monthly dip, sales were up 2.8% year-over-year. The median sales price for existing homes surged to an all-time high, exacerbating affordability challenges for potential buyers. Only the Northeast region saw an increase in previously owned home sales on a monthly basis, while the Midwest, South, and West experienced declines. Year-over-year, sales advanced in all regions except the Northeast, where they remained unchanged.

NAR Chief Economist Lawrence Yun attributed the fluctuations in home sales activity to the sensitivity of buyers to affordability conditions, which are influenced by mild shifts in mortgage rates. He noted that robust job gains, exceeding half a million since the start of the year, continue to provide underlying support for the housing market. In June, first-time homebuyers represented 33% of all sales, a decrease from 35% in May, indicating that entry-level buyers without existing home equity are facing significant market challenges. Yun highlighted that wage growth has outpaced home price appreciation over the past year, leading to improved affordability compared to a year ago.

However, Yun emphasized the critical need for increased housing supply to sustain long-term affordability and prevent further price acceleration. He warned that stalled inventory growth could hinder progress and widen the opportunity gap for homeownership. Single-family home sales fell 2.4% month-over-month to a seasonally adjusted rate of 3.73 million properties, though this figure was 3.3% higher than the previous year. Sales of condominiums and co-ops saw a 2.7% decrease both month-over-month and year-over-year.