Contract closings decreased 5.4% from May to a 3.89 million annualized rate, data released Tuesday from the National Association of Realtors show. That marked the fourth straight decline and the rate trailed all estimates in Bloomberg survey of economists.

The slowdown came as prices reached another record in June, with the median sales price up 4.1% to $426,900. Surprisingly, prices are growing even as more supply has hit the market in recent months, but inventory is still low by historical standards.

In June, there were 1.32 million homes for sale, the most since October 2020 but still well below the 1.9 million that were listed before the pandemic in June 2019. That means at the current sales rate, it would take 4.1 months to exhaust that supply, the longest in four years.

"Even as the median home price reached a new record high, further large accelerations are unlikely," NAR Chief Economist Lawrence Yun said in a statement.

Waiting for Fed

Buyers and sellers alike are eager for the Federal Reserve to start cutting interest rates after keeping them at a two-decade high for the past year. In recent months, inflation has shown more signs of cooling and unemployment has risen, boosting market odds to near-certainty that the Fed will cut in September and December.

The trend has sent mortgage rates lower, with the 30-year contract rate down to 6.87% in the week ended July 12 from this year's peak of 7.29% in April, according to Mortgage Bankers Association figures. However, that's still twice their level from the end of 2021.

About 65% of the homes sold were on the market for less than a month in June, compared with 67% in May, while 29% sold above the list price. Properties remained on the market for 22 days on average in June, compared with 24 days in May, NAR's report said.

While record-high prices hardly indicate that this is a buyer's market, Yun said it's slowly moving away from being a seller's market. Fewer buyers are waiving inspections now compared to a year ago, and houses are taking a little longer to sell but generally still moving swiftly, he said.

Existing-home sales account for the majority of the US total and are calculated when a contract closes. The government will release June new-home sales figures on Wednesday.