U.S. Home Sales Drop in June as Prices Set Record Highs

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U.S. Home Sales Drop in June as Prices Set Record Highs/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. home sales dropped 2.7% in June as elevated mortgage rates and record-high prices squeezed affordability. The national median home price reached an all-time high of $435,300, limiting activity in the housing market. Rising inventories offer more choices, but many buyers remain sidelined by high borrowing costs.

FILE – A sale sign stands outside a home on the market Thursday, Oct. 17, 2024, in the east Washington Park neighborhood of Denver. (AP Photo/David Zalubowski, File)

U.S. Housing Market Quick Looks

June sales of previously owned homes fell 2.7% from May
Median U.S. home price hit a record $435,300
Mortgage rates remained close to 7% during May and June
First-time buyers made up just 30% of all purchases
Housing inventory increased 16% year-over-year but remains below normal
Homes stayed on market for 27 days on average, up from 22 days in 2024
20.7% of listings saw price reductions, highest June rate since 2016
Unsold inventory stood at 1.53 million, well below pre-pandemic averages

Deep Look: U.S. Home Sales Slide in June as Affordability Tightens, Prices Set Records

LOS ANGELES — The U.S. housing market took another hit in June as sales of existing homes fell to their slowest pace since September 2024, reflecting the continuing strain of high mortgage rates and unprecedented price levels. According to the National Association of Realtors (NAR), sales dropped 2.7% month-over-month to a seasonally adjusted annual rate of 3.93 million units.

Compared to the same month last year, sales were flat and fell short of economists’ expectations, which had forecast a pace of 4.01 million. The drop underscores ongoing affordability challenges in a market where the median sale price reached a new all-time high: $435,300.

A Market Stuck in High-Cost Territory

June marked the 24th consecutive month of annual home price increases, further straining the ability of would-be buyers—especially first-time purchasers—to enter the market. The median price has been driven up by both persistent demand and limited inventory, even as total listings have increased year-over-year.

“We’re seeing a market that’s highly sensitive to mortgage rates,” said Lawrence Yun, NAR’s chief economist. “If rates remain high, sales will continue at a sluggish pace. But if they dip closer to 6%, we could see a significant rebound—potentially half a million more homes sold.”

Mortgage Rates Loom Large

Borrowing costs remain a major barrier. In June, buyers were typically locking in mortgage rates between 6.76% and 6.89%. These elevated rates add hundreds to monthly mortgage bills, severely impacting affordability.

The current 30-year fixed rate has hovered near 7% throughout much of 2025, according to Freddie Mac. Yun notes that if rates drop even slightly, the market could experience a noticeable upswing.

Buyer Landscape: Wealthy and Cash-Ready Prevail

First-time buyers comprised only 30% of transactions in June—well below the historic average of 40%. Those still in the market tend to be higher-income households or investors who can afford the elevated rates or pay cash.

Meanwhile, the broader buyer pool is sidelined by income limitations, stagnant wages, and rising homeownership costs. This imbalance is also visible in the rental market, which continues to see strong demand.

Inventory and Seller Behavior Shift

At the end of June, 1.53 million homes remained unsold—a 0.6% decrease from May but a 16% increase from a year ago. Despite the rise, that number remains significantly below pre-pandemic levels, when about 2 million homes were typically on the market.

The inventory translates to a 4.7-month supply at the current sales pace—up from 4 months last year, but still under the 5- to 6-month threshold considered a balanced market.

Homes are taking longer to sell, averaging 27 days on the market compared to 22 a year earlier. In a sign of changing seller behavior, 20.7% of listings in June included price cuts—marking the highest rate for that month since at least 2016.

However, some sellers are opting to delist their properties instead of lowering prices. According to Realtor.com, the number of homes pulled from the market without selling rose 47% in May year-over-year.

What Lies Ahead for 2025

The second half of the year hinges on interest rate movement and broader economic indicators. If rates drop, more buyers may return, spurring higher activity. If rates remain stuck near current levels, expect minimal improvement in both sales volume and price moderation.

Spring 2025 was expected to be a strong buying season, but sluggish conditions and affordability challenges made it one of the weakest in years. The trend may continue unless financing conditions improve.

Despite the slump, there are opportunities—especially for well-qualified buyers and investors. More homes are on the market, and sellers are increasingly open to negotiations, price cuts, or buyer incentives. But for many Americans, the dream of homeownership remains just out of reach.