Existing home sales declined for the fifth straight month in June, falling 5.4 percent from the previous month, according to data from the National Association of Realtors (NAR) released Wednesday.
The figures indicate that record prices and higher interest rates are driving Americans out of the market. The median home price rose to $416,000 last month, up 13.4 percent from last year, while total sales fell by 14.2 percent year-over-year.
“Falling housing affordability continues to take a toll on potential home buyers,” NAR chief economist Lawrence Yun said in a statement. “Both mortgage rates and home prices have risen too sharply in a short span of time.”
Year-over-year prices have risen for 124 consecutive months, the longest streak on record.
Buyers are also getting hammered by higher mortgage rates, which add substantial cost to the total cost of a home. The average fixed 30-year rate was 5.52 percent in June, up from around 3 percent for much of last year, according to Freddie Mac.
The report found that housing supply — a key driver behind record home prices — has improved as sales slow down. Total housing inventory rose 9.6 percent from May to June and 2.4 percent from the previous year.
“Finally, there are more homes on the market,” Yun said. “Interestingly though, the record-low pace of days on market implies a fuzzier picture on home prices. Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”
In the long run, however, housing supply appears to be a challenge.
New home construction slipped 2 percent in June to the lowest level since September 2021, driven by an 8.1 percent decline in single-family housing starts, according to Commerce Department data.
“Affordability is the greatest challenge facing the housing market,” National Association of Home Builders chief economist Robert Dietz said in a statement Tuesday. “Significant segments of the home buying population are priced out of the market. Policymakers must address supply-side issues to help builders produce more affordable housing.”