US existing home sales unexpectedly fell in June, inventory improvement limited, home prices hit a record high

The recent recovery in the U.S. existing home market has been reversed. Dragged down by high mortgage rates, June existing home sales fell month-over-month, while housing affordability remains the core obstacle constraining homebuying demand.

Data released Thursday by the National Association of Realtors (NAR) showed that June existing home sales declined to a seasonally adjusted annual rate of 4.09 million units, down 2.4% month-over-month, and below the 4.20 million unit median estimate in a Bloomberg survey of economists. At the same time, the median price of existing home sales rose 1.8% year-over-year to a record high of $440.6 thousand.

NAR Chief Economist Lawrence Yun said, “Monthly existing home sales data have been repeatedly fluctuating and oscillating with small moves in mortgage rates, reflecting buyers’ high sensitivity to affordability conditions.” He also noted that ongoing growth in the job market in recent months will provide support for the housing market.

The pullback in sales has interrupted the upward trend in the U.S. existing home market seen over the past several months. Currently, the 30-year fixed mortgage rate is hovering around 6.6%. Although the NAR Housing Affordability Index has improved slightly compared with a year ago, it remains at the lowest level since August 2025.

Sales facing broad-based pressure, with the South dragging the most

Regional performance has diverged significantly, with the South—the country’s largest existing home sales market—leading the decline. In June, existing home sales in the South fell 3.6% month-over-month to 1.89 million units, with a drop larger than the national average.

Sales also declined in the Midwest and the West, while only the Northeast recorded growth.

The participation rate of first-time homebuyers also contracted. In June, first-time buyers accounted for 33% of total sales, down from 35% in May, reflecting the continued squeeze from affordability pressures on entry-level homebuyer groups.

Limited improvement in inventory, and prices hit a historic high

Existing home inventory conditions have failed to provide effective relief. In June, the inventory of existing homes for sale was 1.56 million units, up 1.3% year-over-year, but there was a slight month-over-month decline for the first time this year. Lawrence Yun characterized this year-over-year increase as “trivial.”

“We need to see a 30%, 40% increase,” he said. “But we simply don’t see it right now.”

Meanwhile, price pressure has not eased. The median sales price of $440.6 thousand hit a historic high, but the 1.8% year-over-year increase is far lower than the pace seen two years ago, indicating that upward momentum in prices has clearly slowed.

Rate stalemate continues, leaving recovery prospects in doubt

The core issue still points to interest rates. Mortgage rates around 6.6% have kept many potential homebuyers on the sidelines, and whether the earlier rebound in existing home contracts—typically leading closed sales by about one to two months—can continue remains to be seen.

Lawrence Yun expressed optimism about the job market, believing that continued employment growth will provide a bottom support for housing demand.

However, until the trajectory of interest rates becomes clearer, affordability pressures are likely to continue to dominate the direction of the market, and a substantive recovery in existing home sales still faces high uncertainty.

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