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US home sales fell in June amid rising prices

Existing home sales dropped to the lowest pace since September as prices reached new highs.

July 23, 2025 at 03:29 PM

US home sales fade in June as prices soar to record levels

The U.S. housing market faces challenges as home sales drop and prices reach record levels.

US home sales decline as prices hit historic highs

Sales of previously occupied homes in the United States dropped 2.7% in June, marking the lowest rate since last September. The National Association of Realtors reported a seasonally adjusted annual rate of 3.93 million units sold. This year's numbers fell below economists' expectations and remained flat compared to June last year. Median home prices rose by 2% to $435,300, establishing yet another record high. Increased mortgage rates, hovering around 7%, have severely impacted buyers' abilities to afford homes, exacerbating an already strained market. Despite a slight increase in available homes, the total inventory remains substantially lower than pre-pandemic levels, with 1.53 million unsold homes recorded at the end of June. Many potential buyers are sidelined, struggling to compete in a market that has seen a significant downturn in first-time home buyers, now at 30%, compared to the historical average of 40%.

Key Takeaways

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Home sales fell by 2.7% in June, reaching a low not seen since last September.

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Median home prices soared to $435,300, marking an all-time high.

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The number of unsold homes rose to 1.53 million but remains below normal levels.

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High mortgage rates continue to hinder buyers, reducing purchasing power significantly.

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First-time buyers now account for just 30% of home sales, down from a historical average of 40%.

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A growing number of sellers are choosing to delist homes instead of reducing prices.

"The second half of the year really depends on what happens with mortgage rates."

Lawrence Yun highlights how critical mortgage rates are for future home sales.

"Many aspiring first-time homebuyers are now on the sidelines."

This reflects the growing difficulty faced by new buyers in the current market conditions.

"If the mortgage rate remains stuck at this level, we are essentially looking at very small changes in our home sales."

Yun suggests the limited impact on sales without a drop in mortgage rates.

"Twenty percent of homes had their prices reduced last month, the highest since 2016."

This indicates a significant adjustment in the market dynamics as sellers struggle to attract buyers.

The current housing market reflects a broader economic trend where rising prices collide with affordability challenges. High mortgage rates significantly restrict the purchasing power of many buyers, leading to a stagnated market. As Lawrence Yun, NAR’s chief economist, indicated, the trajectory for home sales in the latter half of the year heavily relies on mortgage rate fluctuations. While slight increases in inventory might offer hope for some prospective buyers, the overall economic landscape suggests prolonged difficulties. The situation illustrates a classic supply and demand dilemma, where too few homes and high prices create an environment unsuitable for many buyers, particularly first-time purchasers who find themselves increasingly marginalized in the market.

Highlights

The housing market shows uncertainty as prices remain high amid declining sales.
High mortgage rates are limiting many would-be homebuyers' options.
The rise in home prices reflects ongoing challenges for prospective buyers.
Sellers are increasingly withdrawing homes from the market instead of lowering prices.

Concerns over housing market stability

Elevated mortgage rates and soaring home prices create a challenging environment for buyers, particularly first-time buyers who are withdrawing from the market. This situation raises concerns about long-term market stability as affordability issues persist.

As the market grapples with affordability and rate issues, future sales trends remain uncertain.

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housing market mortgage economy realestate real estate economy

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