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It’s a tough time to be a homebuyer in the US, and, unfortunately, it got tougher in June.
The National Association of Realtors said on Wednesday that existing-home prices jumped last month, with the median price reaching $435,300.
While only a 2% increase from June 2024, it’s the highest home prices have ever been.
As prices trend up, sales of existing homes have been moving in the opposite direction. NAR data shows that sales fell 2.7% in June. While month-over-month sales rose slightly in the West, they declined in the Northeast, Midwest, and South regions.
NAR Chief Economist Lawrence Yun attributed the price surge to years of undersupply, stating that the trend is prohibiting new buyers from entering the housing market.
“High mortgage rates are causing home sales to remain stuck at cyclical lows,” Yun stated. “If the average mortgage rates were to decline to 6%, our scenario analysis suggests an additional 160,000 renters becoming first-time homeowners and elevated sales activity from existing homeowners.”
It’s the latest stat that shows how brutal the market is for homebuyers, even as other recent data suggested things could be tilting in their favor. Inventory is piling up, which often suggests prices could edge down.
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However, data shows that sellers are more often pulling their homes off the market rather than negotiating or lowering prices.
Others have noted that the high barriers to homeownership are particularly tough on first-time buyers, many of whom are younger. The high costs of owning a home have compelled a growing number of Gen Z members to view renting as a better alternative.
NAR data shows that housing costs are rising even as economic uncertainty remains high, and the market could enter an even deeper freeze after years of sluggish sales activity.
On a somewhat hopeful note, Yu said that one factor could help push the US housing market out of its slump.
“If mortgage rates decrease in the second half of this year, expect home sales to increase across the country due to strong income growth, healthy inventory, and a record-high number of jobs,” he stated.
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