Sales of previously owned US homes fell in June to a nine-month low as potential buyers continued to bristle at record prices and high borrowing costs.
Contract closings decreased 2.7% in June to an annualized rate of 3.93 million, a report from the National Association of Realtors showed Wednesday. Economists surveyed by Bloomberg expected a 4 million sales rate.
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The median sales price increased 2% in June from a year ago to $435,300. Home prices continue to rise even after a recent pickup in inventory.
"Multiple years of undersupply are driving the record high home price. Home construction continues to lag population growth," Lawrence Yun, NAR chief economist, said in a statement. "High mortgage rates are causing home sales to remain stuck at cyclical lows."
Yun said on a call with reporters that it's typical to see high home prices this time of year because families want to move before the school year begins.
The nation's home-resale market is likely to limp along for the foreseeable future as would-be buyers contend with mortgage rates hovering near 7% and prices that are up almost 50% from five years ago. While home listings have increased this year, many owners are hesitant to give up mortgages secured at much lower rates.
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In a sign that buyers are balking at high asking prices, 21% of the homes sold were above list price, down from 28% in May.
Economists at Goldman Sachs said in a recent note that 87% of mortgage holders have rates below current rates, and two-thirds have borrowing costs 2 percentage points below current rates, "strongly disincentivizing them from moving."
Yun said an NAR analysis showed that a 6% mortgage rate would lead to about a half million more homes sold and an additional 160,000 renters becoming first-time homeowners.
The weak housing market has got the attention of President Donald Trump, who said this week that he's considering a proposal to end
"Housing in our Country is lagging because Jerome 'Too Late' Powell refuses to lower Interest Rates," Trump said in a social media post Wednesday, referring to the Fed chair. "Families are being hurt because Interest Rates are too high."
Last month, the inventory of previously owned homes for sale edged down from a five-year high, NAR data show. Yun has expressed surprise in previous monthly calls with reporters that the bigger supply hadn't led to a pickup in sales, earlier speculating that a larger selection would bring buyers off the sidelines.
In June, 59% of homes were on the market for less than a month, compared with 60% a month earlier.
Individual investors or second-home buyers accounted for 14% of purchases in June, down from 17% a month earlier and the lowest since 2022. First-time buyers accounted for 30% of closings, the same as in May.
Sales declined in all regions but the West. The federal government will provide a look at June new-home sales on Thursday.
