High mortgage rates and record prices are deterring homebuyers.
According to the National Association of Realtors, existing home sales in June were 4.09 million units, down 2.4% from May on a seasonally adjusted annual basis. Housing analysts had expected a slight increase from the previous month.
However, sales in June increased by 2.8% compared to the same month last year.
“The ebb and flow of monthly home sales activity driven by gradual changes in mortgage rates shows how sensitive homebuyers are to affordability conditions,” Lawrence Yun, chief economist at The Realtors, said in a release. “However, job gains of more than 500,000 jobs since the beginning of the year will continue to support the housing market.”
This number represents closed sales, so the contracts were likely signed in May, when average interest rates on 30-year fixed mortgages were still rising. It began to rise sharply in early March, when the Iran war began.
Inventory at the end of June was 1.56 million units, a decrease of 0.6% from May, but an increase of 1.3% compared to June 2025. At the current sales pace, this equates to 4.6 months’ supply. The market is considered to be balanced between buyers and sellers with six months’ supply.
Prices continue to rise as the market remains depressed. The median price of existing homes sold in June was $440,600, an increase of 1.8% from a year ago and a record high. June is typically the strongest month for both sales and prices.
“If inventory growth continues to stagnate, it could hinder long-term home price growth. If inventory does not increase consistently, home prices could accelerate. Introducing more supply to the market is important to expand homeownership opportunities,” Yun said.
Sales in the high-end market continue to be strong. Sales of homes priced under $100,000 decreased by 1.7% year over year, while sales of homes priced between $100,000 and $250,000 increased by less than 1%. Meanwhile, sales of homes priced between $750,000 and $1 million increased nearly 14% year over year, and sales of homes priced over $1 million increased 18%.
By region, housing sales in June decreased from the previous month in all regions except the Northeast.
A quarter of all sales were in cash, down from 29% last year. First-time buyers accounted for 33% of sales, up from 30% a year ago.
