US Existing Home Sales Plunge to 9-Month Low Amidst Record Prices and High Mortgage Rates

The U.S. housing market experienced a significant setback last month, with existing home sales falling to their lowest level in nine months. Industry data released Wednesday revealed a 2.7 percent drop in June, bringing sales to a seasonally adjusted annual rate of 3.9 million units.

This downturn significantly missed analysts’ consensus forecasts, which had anticipated a smaller decline. The National Association of Realtors (NAR) highlighted that despite sales remaining flat year-on-year, the median home price surged by two percent from a year ago, reaching a record high of $435,300 for the month of June.

Lawrence Yun, NAR’s chief economist, attributed the record-high prices to years of undersupply, noting, “Home construction continues to lag population growth. This is holding back first-time home buyers from entering the market.”

Elevated mortgage rates are also fueling the market’s gloom. The popular 30-year fixed-rate mortgage averaged around 6.8 percent in the latter half of June, a level that significantly impacts affordability. Yun suggested that a drop in average mortgage rates to six percent could stimulate the market, potentially allowing an additional 160,000 renters to become first-time homeowners.

The Federal Reserve’s decision to maintain benchmark lending rates has drawn criticism, with former President Donald Trump reiterating his call for lower interest rates yesterday, arguing that the Fed’s stance is impeding housing growth, despite economic warnings about potential inflation from tariffs.

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