Existing home sales drop 5.4% as prices hit new record high in June

Existing home sales in the United States fell significantly in June, while the median sales price reached a new record high for the second consecutive month, according to a report released Monday by the National Association of Realtors (NAR).

The NAR data shows that existing home sales declined 5.4% to a seasonally adjusted annual rate of 3.89 million in June, compared to both the previous month and the same period last year. This decrease was observed across all four major U.S. regions.

Simultaneously, the median existing-home sales price climbed to an all-time high of $426,900, marking a 4.1% increase from June 2023. This represents the twelfth consecutive month of year-over-year price gains.

Lawrence Yun, NAR Chief Economist, commented on the shifting market dynamics: "We're seeing a slow shift from a seller's market to a buyer's market. Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis."

The inventory of unsold existing homes rose 3.1% from May to 1.32 million at the end of June, equivalent to a 4.1-month supply at the current monthly sales pace. This represents a significant increase from the 3.1-month supply recorded in June 2023.

Yun added, "Even as the median home price reached a new record high, further large accelerations are unlikely. Supply and demand dynamics are nearing a balanced market condition. The monthly supply of inventory reached its highest level in more than four years."

The report also highlighted changes in buyer demographics and transaction types. First-time buyers accounted for 29% of sales in June, down from 31% in May but up from 27% in June 2023. All-cash sales made up 28% of transactions, unchanged from May and up from 26% one year ago.

Individual investors or second-home buyers, who often make cash purchases, bought 16% of homes in June, unchanged from May but down from 18% in June 2023.

The housing market continues to face challenges from elevated mortgage rates. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.77% as of July 18, slightly lower than both the previous week and the same period last year.

As the real estate landscape evolves, industry observers will be closely monitoring these trends for signs of further market shifts in the coming months.