US home prices hit an all-time high as sales slow and mortgage rates rise

Washington DC [US], July 11: Sales of previously occupied US homes slowed in June, but a key measure of home prices climbed to an all-time high, adding to affordability challenges for prospective homebuyers.
Existing home sales fell 2.4 percent last month from May to a seasonally adjusted annual rate of 4.09 million units, the National Association of Realtors said Thursday. Sales rose 2.8 percent compared with June last year.
The latest sales tally fell short of the roughly 4.21 million pace economists were expecting, according to FactSet.
Home sales have been mostly hovering close to a 4-million annual pace going back to 2023, far short of the historic norm that is closer to 5.2-million.
Sales have remained sluggish as mortgage rates have mostly trended higher in the months since the war between the US and Iran started. Expectations of higher inflation amid surging oil prices have pushed up the long-term bond yields that lenders use as a guide to pricing home loans, causing mortgage rates to climb. Still, mortgage rates remain below where they were a year ago.
Despite the lackluster sales, home prices continued to rise nationally last month. The U.S. median sales price increased 1.8 percent in June from a year earlier to $440,600, an all-time high on data going back to 1999, NAR said. Home prices have risen on an annual basis for 36 months in a row. First-time buyersaccounted for 33 percent of home purchases last month, down from 35 percentin May and up from 30 percent in June last year.
Historically, they made up 40 percent of home sales. "Without a doubt, the affordability is a major challenge for people who want to become homeowners, which is the reason why we need more supply," said Lawrence Yun, NAR's chief economist.
The US housing market has been in a slump since 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied US homes were essentially flat last year, stuck at a 30-year low.
Through the first half of this year, seasonally adjusted sales of existing US homes are up only 0.7 percent compared to the same period in 2025.
Years of soaring home prices, especially in the early part of this decade when rock-bottom mortgage rates fueled a buying frenzy, have left many would-be homebuyers frozen out of the market. And a chronic shortage of homes for sale nationally, due partly to years of below-average new home construction, has helped prop up home prices even in a multiyear sales slump.
Many of the homes purchased last month likely went under contract in April and May, when the average rate on a 30-year mortgage ranged from 6.23 percent to 6.53 percent -- the highest level going back to late August, according to mortgage buyer Freddie Mac.
Those who can afford to buy at current mortgage rates or pay all cash are likely to encounter buyer-friendly trends in many markets. In June, median list prices fell 2.5 percent from a year earlier, the steepest annual drop on data going back to 2017, according to Realtor.com.
Still, housing market pricing trends vary widely regionally and locally. Consider, since peaking in 2022 at $449,000, list prices have come down 7.3 percent in the West and 3.5 percent in the South, but are up 10 percent in the Midwest and 12.6 percent in the Northeast, according to Realtor.com.
Meanwhile, home shoppers have more homes on the market to choose from than this time last year, although home inventory levels remain well below historical norms. There were 1.56 million unsold homes at the end of last month, down 0.6 percent from May and up 1.3 percent from June last year, NAR said.
Source: Qatar Tribune