WASHINGTON — U.S. home prices climbed to a record high in June even as existing home sales unexpectedly slowed, underscoring persistent affordability pressures that continue to keep many prospective buyers out of the housing market despite a modest increase in homes available for sale.
The median existing-home price rose to an all-time high in June, while sales of previously owned homes fell 2.4% from the previous month to a seasonally adjusted annual rate of 4.09 million units, according to data released by the National Association of Realtors (NAR). Economists surveyed by Reuters had expected sales to edge higher.
The June sales pace was 2.8% above a year earlier but remained well below levels considered typical before borrowing costs surged in recent years. Existing-home sales have hovered near a 4 million annual rate since 2023, reflecting sustained affordability constraints.
NAR attributed the slowdown largely to elevated mortgage rates and high purchase prices, which have continued to discourage many first-time and middle-income buyers. Existing-home transactions are recorded at closing, meaning June figures largely reflected contracts signed in April and May.
Mortgage financing costs remained elevated following recent geopolitical tensions that pushed Treasury yields higher. Freddie Mac reported the average rate on a 30-year fixed mortgage remained significantly above levels seen before the conflict in the Middle East, adding to monthly borrowing costs for prospective homeowners.
Separate industry data pointed to further weakness in housing demand. Pending home sales, which measure contract signings and serve as a leading indicator of completed transactions, declined sharply in June, suggesting sales activity could remain subdued in the coming months. Lawrence Yun, NAR's chief economist, said high mortgage rates combined with record home prices continued to weigh on buyer activity.
Homebuilders also reported deteriorating confidence in July. The National Association of Home Builders/Wells Fargo Housing Market Index fell for a second consecutive month as builders cited economic uncertainty and financing costs, while more companies resorted to price reductions and sales incentives to attract buyers.
Despite softer sales, limited inventory in many markets has continued to support prices. Analysts said supply remains constrained by homeowners reluctant to sell and give up lower mortgage rates secured in earlier years, even as inventory has gradually improved from pandemic-era lows.
Congress recently approved bipartisan legislation intended to improve housing affordability by accelerating construction approvals and limiting institutional ownership of some single-family homes. Housing economists said the impact of those measures will depend on implementation, while affordability is likely to remain closely tied to future movements in mortgage rates and housing supply.
