U.S. Existing Home Sales Fell 2.4% in June as Affordability Woes Persist

U.S. existing home sales declined 2.4% in June, reaching a seasonally adjusted annual rate of 4.09 million units. This figure fell below the consensus expectation of 4.20 million units, indicating continued headwinds in the housing market. Despite the monthly decrease, sales are up 2.8% when compared to the same period last year.

The decline in June was broadly distributed across the country, with sales falling in the South, Midwest, and West regions. The Northeast, however, bucked the trend, experiencing an increase in sales. The overall drop encompassed both single-family homes and condominium/co-op properties, suggesting a widespread impact on the resale market.

The median price of an existing home rose to $440,600 in June, a 2.2% increase from May, though this metric is not seasonally adjusted. On a year-over-year basis, the median price climbed 1.8%. This modest annual increase suggests that while overall inflation data might be influenced by recent geopolitical events, home price growth is showing signs of moderation, which could eventually improve affordability.

Existing home sales have largely stagnated around a 4.00 million annual rate for the past three years, a pace reminiscent of the aftermath of the Great Financial Crisis and significantly below the 5.25 million pace observed pre-pandemic. The primary factor continues to be affordability, which has worsened following recent geopolitical tensions and associated increases in energy costs. This environment has diminished the likelihood of near-term interest rate cuts from the Federal Reserve, leading to a roughly 50-basis point increase in 30-year mortgage rates since February, now hovering around 6.6%.

However, some positive developments are emerging for prospective buyers. The inventory of existing homes listed for sale has been improving, reaching its highest level since the pandemic, though still below pre-COVID volumes. The months' supply of homes, which measures how long it would take to sell the current inventory at the prevailing sales pace, increased to 4.6 in June. This figure is nearing the 5.0-month mark that the National Association of Realtors typically associates with a balanced market. Furthermore, aggregate wage growth (combining hourly earnings and hours worked) has consistently outpaced median home price gains since early 2025, which gradually enhances purchasing power and affordability.

Key terms

1. **Seasonally adjusted annual rate:** A statistical adjustment applied to economic data to remove predictable seasonal fluctuations, making it easier to compare data across different periods and identify underlying trends.

2. **Median price:** The middle price of all homes sold, meaning half of the homes sold for more and half sold for less. It is often preferred over the average price as it is less influenced by a few extremely high-priced sales.

3. **Months' supply of homes:** A measure of housing inventory calculated by dividing the number of homes currently for sale by the average monthly sales rate. It indicates how long it would take for all currently available homes on the market to sell at the current pace of sales.