Sales of previously occupied U.S. homes dipped in June, but the median sales price reached a new record high, exacerbating affordability issues for prospective buyers. The National Association of Realtors reported that existing home sales fell 2.4% from May to a seasonally adjusted annual rate of 4.09 million units, falling short of economists' expectations.
Home sales have largely hovered around a 4-million annual pace since 2023, a significant decrease from the historical norm closer to 5.2 million units. This sluggishness is attributed in part to rising mortgage rates, influenced by expectations of higher inflation driven by surging oil prices in the wake of recent geopolitical events. While mortgage rates have trended higher, they remain below their levels from the previous year.
Despite the decline in sales volume, the median sales price of U.S. homes rose 1.8% in June compared to the same month last year, reaching $440,600. This marks the highest median price on record dating back to 1999, with home prices increasing on an annual basis for 36 consecutive months.
First-time homebuyers represented 33% of purchases in June, a decrease from 35% in May and up from 30% in June of the prior year. Historically, first-time buyers have constituted 40% 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 U.S. housing market has experienced a slump since 2022, when mortgage rates began to climb from pandemic-era lows. Sales were essentially flat last year, hitting a 30-year low.
Through the first half of this year, sales of existing U.S. homes have seen only a 0.7% increase compared to the same period in 2025. Years of escalating home prices, particularly during the early 2020s when low mortgage rates fueled a buying surge, have priced many potential buyers out of the market. A persistent shortage of available homes, partly due to years of below-average new home construction, has also contributed to maintaining high prices even amidst a prolonged sales downturn.
Many homes sold in June likely went under contract in April and May, when the average 30-year mortgage rate ranged from 6.23% to 6.53%, the highest levels seen since late August, according to Freddie Mac. Buyers who can afford current mortgage rates or pay in cash may find more favorable conditions in certain markets. Median list prices in June decreased by 2.5% from the previous year, the steepest annual drop recorded since 2017, according to Realtor.com.
Regional price trends vary significantly. For instance, while list prices have decreased in the West and South since their peak in 2022, they have risen in the Midwest and Northeast.
Home inventory levels have increased compared to last year, though they remain below historical norms. At the end of June, there were 1.56 million unsold homes, a slight decrease from May but an increase from June 2025. This inventory level is still substantially lower than the approximately 2 million homes typically available before the COVID-19 pandemic.
This inventory represents a 4.6-month supply at the current sales pace, below the 5- to 6-month supply considered indicative of a balanced market. "We need to see 30%-40% growth in inventory. We’re not seeing that, so inventory (is) still remaining relatively tight," Yun stated.