Existing-home sales decrease in June

High prices and low inventory are making it difficult for first-time homebuyers to enter the market.

Existing-home sales drop 2.7% in June as high prices continue pressure

According to the National Association of REALTORS®, existing-home sales saw a 2.7% decline in June, resulting in a seasonally adjusted annual rate of 3.93 million. The slowdown affected sales across most regions except for a slight increase in the West, where prices continued to rise significantly. The average homeowner's wealth increased over the past five years, but high median home prices, which reached a record of $435,300, are creating barriers for newcomers. Chief Economist Lawrence Yun highlights that home construction has not kept pace with population growth, significantly limiting available inventory and further hampering first-time buyer participation in the market.

The decline in existing-home sales reflects a wider trend of stagnation within the housing market, driven by a combination of high prices and low supply. With first-time buyers facing significant challenges, including high mortgage rates hovering around 6.75%, the prospect of homeownership seems increasingly distant for many. If mortgage rates were to drop, experts predict a considerable uptick in activity from first-time buyers, suggesting that even a minor shift in economic conditions could alter market dynamics. This situation underscores the urgent need for policy interventions to boost home construction, making housing accessible for a broader segment of the population.

Highlights

The future of the housing market will depend heavily on mortgage rate adjustments and new construction efforts.