US Home Sales Drop as Prices Hit Record Highs

US home sales fell 2.7% in June to an annualized 3.9 million units, the slowest pace since September, while median prices for previously owned homes hit a record $435,300, up 2% from last year, the National Association of Realtors reported. High mortgage rates and economic uncertainty deterred buyers, dampening hopes for a spring homebuying surge.

The average 30-year mortgage rate was 6.84% for the week ending July 18, with rates above 6% since September 2022. Lawrence Yun, NAR’s chief economist, noted that a drop to 6% could enable 160,000 renters to buy homes. Chronic undersupply, driven by lagging home construction, continues to push prices higher.

Homeowners’ reluctance to sell due to low-rate mortgages secured before 2022 rate hikes has tightened inventory, though it recently ticked up. Citi economist Veronica Clark cited high rates, affordability issues, and a weakening labor market as demand constraints. Cotality’s Selma Hepp predicted no recovery this year, especially in the slower fall season. Zonda’s Ali Wolf warned that rising prices amid falling demand are unsustainable, signaling ongoing challenges for the US housing market in 2025.