The American housing market continues to challenge prospective buyers as home prices reached unprecedented levels in June, even as sales activity remained disappointingly slow. The median price for a previously owned home climbed to $440,600, marking the highest figure recorded since tracking began in 1999.
According to the National Association of Realtors, existing home sales dropped 2.4% from May to an annualized rate of 4.09 million units, falling short of economist expectations of approximately 4.21 million. This figure remains significantly below the historical norm of around 5.2 million annual sales, a trend that has persisted since 2023.
The ongoing conflict between the United States and Iran has contributed to rising mortgage rates, as expectations of higher inflation driven by surging oil prices have pushed up long-term bond yields. These yields serve as benchmarks for lenders when setting home loan rates. During April and May, when many of June’s closed sales were initially contracted, 30-year mortgage rates ranged between 6.23% and 6.53%.
First-time homebuyers continue to struggle in this challenging environment, representing only 33% of purchases last month compared to the historical average of 40%. Lawrence Yun, the NAR’s chief economist, emphasized that increased housing supply is essential to address the severe affordability crisis facing aspiring homeowners.
While national prices continue their 36-month streak of year-over-year increases, some relief exists for buyers in certain regions. List prices have declined 7.3% in the West and 3.5% in the South since their 2022 peak, though the Midwest and Northeast have seen increases of 10% and 12.6% respectively. Housing inventory stood at 1.56 million unsold homes at month’s end, still well below the pre-pandemic norm of approximately 2 million units.
