US existing home sales dropped more than expected in June, according to industry data released Tuesday, while the median price hit a new high.
The trends, underscoring affordability challenges for homebuyers, come even as mortgage rates cooled slightly. But a larger stock of inventory currently is seen as an encouraging sign that market conditions are improving.
Sales of previously-owned homes retreated 5.4 percent from May to a seasonally adjusted annual rate of 3.9 million in June, the National Association of Realtors (NAR) said.
The figure was slightly below the 4.0 million rate a Briefing.com consensus forecast of analysts anticipated, and the lowest reading since December 2023.
NAR chief economist Lawrence Yun likened recent market trends to “groundhog day,” with home sales stuck at a low level, prices hitting record highs and mortgage rates at elevated levels.
But he added: “We’re seeing a slow shift from a seller’s market to a buyer’s market.”
Sellers are receiving fewer offers and more buyers are insisting on home inspections and appraisals.
“Inventory is definitively rising on a national basis,” he said.
As of late June total housing inventory stood at 1.3 million units — 23.4 percent higher than the level a year ago.
There was also a 4.1-month supply of unsold inventory based on the current sales pace, and the last time the market saw a four-month supply was May 2020.
– All-time high –
From a year ago, sales of existing homes were down by 5.4 percent, the NAR said.
Buyers could be holding back in hopes of lower mortgage rates, given that the Federal Reserve is now anticipated to cut interest rates this year, Yun said, among other industry factors.
Meanwhile, the median sales price hit an all-time high for a second straight month, reaching $426,900 in June.
Yun, however, believes that “further large accelerations are unlikely.”
While sales may be close to rock bottom, “that’s cold comfort for Americans looking to become homeowners, especially as existing home prices hit a new high,” said Navy Federal Credit Union corporate economist Robert Frick.
“The faint silver lining for now is mortgage rates have dropped a bit,” he added in a note.
As of July 18, the popular 30-year fixed-rate mortgage averaged 6.8 percent, down from the prior week and the level a year ago, according to Freddie Mac.
Sales declined in all four major US regions in June, said the NAR.
