The American housing market delivered a familiar and frustrating message last week: homes have never cost more, and fewer people are buying them. The National Association of Realtors reported Thursday that existing-home sales fell 2.4% in June to a seasonally adjusted annual rate of 4.09 million, even as the median price for a previously owned home climbed to a record $440,600. It was the 36th straight month of year-over-year price gains, leaving would-be buyers squeezed between rising home prices and mortgage rates that remain stubbornly high.
The June decline reversed a five-month high reached in May and came in below the roughly 4.20 million pace economists had expected. Still, sales were 2.8% higher than June 2025, suggesting the market has stabilized at relatively low levels rather than entering a sharp downturn.
“The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions,” said Lawrence Yun, Chief Economist at the National Association of Realtors.
Borrowing costs remain the market’s biggest obstacle. The average 30-year fixed mortgage stood at 6.49% during June, according to Freddie Mac. While slightly below last year’s level, mortgage rates remain high enough to significantly increase monthly payments compared with just a few years ago. June sales largely reflect buyers who locked in financing during April and May, when rates moved higher.
The record median sales price creates two very different realities. Existing homeowners continue building wealth as home values appreciate, while first-time buyers face increasingly difficult affordability challenges.
“Is this good news, like the stock market, or bad news, like grocery prices?” Yun asked while discussing the record price. “It’s good news for existing homeowners because it builds housing wealth, but it’s difficult news for first-time buyers and renters trying to purchase their first home.”
The typical homeowner is expected to gain roughly $16,000 in housing wealth this year if current price trends continue.
Limited inventory continues to drive the imbalance. At the end of June, there were 1.56 million homes available for sale nationwide—only slightly higher than one year ago. Yun argues inventory needs to increase 30% to 40% before affordability meaningfully improves.
“Without consistent gains in inventory, home prices can continue accelerating,” Yun said. “It’s critical to introduce more supply to widen the opportunity for homeownership.”
Housing supply stood at 4.6 months, still below the five-to-six-month level generally considered a balanced market. That continues giving sellers an advantage despite slower sales activity.
There were modest signs of improvement for first-time buyers. They accounted for 33% of June transactions, up from 30% a year earlier, although still below the roughly 40% share considered healthy historically. All-cash purchases also declined to 25% of sales from 29% a year ago, suggesting investor activity may be easing.
The housing slowdown extends well beyond real estate. Every home sale typically generates additional spending on furniture, appliances, home improvements, moving services, insurance, and mortgage financing. When transactions slow, retailers, contractors, and financial institutions all feel the effects.
Looking ahead, the National Association of Realtors expects modest improvement during the second half of the year if inventory gradually expands. The organization forecasts both existing-home sales and home prices will rise about 4% during 2026, assuming mortgage rates remain near current levels.
Whether buyers receive meaningful relief will largely depend on interest rates. With the Federal Reserve maintaining a cautious stance and global energy prices rising again, mortgage rates could remain elevated longer than many prospective homeowners had hoped. Until affordability improves, the housing market appears likely to remain stuck in its current pattern: record prices, limited inventory, and fewer completed sales.
JBizNews Desk | New York
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