US Home Prices Reach Record High Amidst Slowing Sales and Rising Mortgage Rates

The median sales price for previously occupied U.S. homes reached an all-time high of $440,600 in June, an increase of 1.8% compared to the same month last year, according to the National Association of Realtors (NAR). This marks 36 consecutive months of year-over-year price gains.

Despite the record prices, sales of existing homes saw a decrease of 2.4% from May to a seasonally adjusted annual rate of 4.09 million units. This figure fell short of economists' expectations, which were around 4.21 million units. Compared to June of the previous year, sales rose by 2.8%.

Home sales have largely remained below the historic norm of approximately 5.2 million annual units since the start of 2023, hovering closer to a 4 million annual pace. This sluggishness is attributed to persistently high mortgage rates, which have trended upward in recent months. While current rates remain below those of a year ago, they continue to challenge prospective homebuyers' affordability.

The ongoing affordability challenges are compounded by the sustained rise in home prices, which have now reached a new national benchmark. The combination of slowing sales and increasing prices indicates a persistent imbalance in the housing market.