Sales of previously owned U.S. homes declined in June even as prices climbed to a record high, the National Association of Realtors reported Thursday, underscoring how elevated borrowing costs continue to limit affordability during what is typically the busiest season for the housing market.

Existing-home sales fell 2.4% from May to a seasonally adjusted annual rate of 4.09 million, below economists’ expectations of approximately 4.21 million, according to FactSet. Despite the monthly decline, sales remained 2.8% higher than a year earlier.

At the same time, the median existing-home price reached a record $440,600 for the month of June, extending a long streak of annual price increases. The combination of slowing sales and record prices continues to challenge prospective buyers, many of whom remain priced out of the market despite modest improvements in housing inventory.

Dr. Lawrence Yun, Chief Economist for the National Association of Realtors, attributed much of the market’s weakness to mortgage affordability. He said monthly fluctuations in existing-home sales continue to track even modest changes in mortgage rates, demonstrating just how sensitive buyers remain to financing costs. While Yun pointed to continued job growth as a positive long-term factor supporting housing demand, he emphasized that affordability remains the industry’s biggest obstacle and reiterated the need for substantially more housing supply.

Mortgage rates remain central to the market’s direction. According to Freddie Mac, the average 30-year fixed-rate mortgage stood at 6.43% as of July 2, marking a seven-week low and down slightly from 6.49% the previous week and 6.67% one year earlier. Because existing-home sales are recorded at closing, June’s figures primarily reflect purchase contracts signed in April and May, when mortgage rates were moving higher.

Those borrowing costs continue to be influenced by Treasury yields, which have risen as investors respond to higher oil prices, persistent inflation concerns and renewed geopolitical tensions in the Middle East. As long as long-term Treasury yields remain elevated, mortgage rates are likely to remain under pressure as well, limiting affordability for many prospective buyers.

The composition of homebuyers also reflected the affordability challenge. First-time buyers accounted for 33% of June transactions, up from 30% a year earlier but still well below the 40% share that the National Association of Realtors considers representative of a healthy housing market. Meanwhile, approximately 25% of all purchases were completed with cash, illustrating the continued advantage enjoyed by buyers less dependent on financing.

Housing inventory showed modest improvement. Roughly 1.56 million existing homes were available for sale at the end of June, about 1.3% higher than one year earlier. Even so, that represents only a 4.6-month supply, remaining below the level generally considered balanced between buyers and sellers.

The slowdown has now persisted for several years. Existing-home sales have remained near an annual pace of 4 million since 2023, well below the long-term historical average of roughly 5.2 million. Through the first half of 2026, total sales were only 0.7% above the same period a year earlier, reflecting a market that continues to struggle despite solid employment and resilient consumer demand.

The housing slowdown affects far more than homebuyers and real estate agents. Every home sale typically generates additional spending on furniture, appliances, home improvements, moving services, insurance, mortgage financing and numerous local businesses. When housing activity slows, those industries often experience weaker demand as well, reducing economic activity across a broad range of sectors.

Lawmakers continue debating measures designed to increase housing supply and improve affordability, but meaningful expansion of inventory will take time. In the meantime, economists generally expect mortgage rates to remain above historical norms, limiting affordability for many households.

With home prices at record highs, mortgage rates still above 6%, and inventory remaining relatively limited, June’s housing report suggests the market continues to face significant affordability pressures. Until either financing costs decline meaningfully or substantially more homes become available, many prospective buyers are likely to remain on the sidelines.

JBizNews Desk | Washington

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