LOS ANGELES (AP) — The nation’s housing slump deepened in June as sales of previously occupied homes slowed to their slowest pace since December, hampered by elevated mortgage rates and record-high prices.
Sales of previously occupied U.S. homes fell 5.4% last month from May to a seasonally adjusted annual rate of 3.89 million, the fourth consecutive month of declines, the National Association of Realtors said Tuesday.
Existing home sales were also down 5.4% compared with June of last year. The latest sales came in below the 3.99 million annual pace economists were expecting, according to FactSet.
Despite the pullback in sales, home prices climbed compared with a year earlier for the 12th month in a row. The national median sales price rose 4.1% from a year earlier to $426,900, an all-time high with records going back to 1999.
Home prices rose even as sales slowed and the supply of properties on the market climbed to its highest level since May 2020.
All told, there were about 1.32 million unsold homes at the end of last month, an increase of 3.1% from May and up 23% from June last year, NAR said.
While still below pre-pandemic levels, the recent increase in homes for sale suggests that, despite record-high home prices, the housing market may be tipping in favor of homebuyers.
For now, sellers are still benefiting from a tight housing market inventory.
Homebuyers snapped up homes last month typically within just 22 days after the properties hit the market. And 29% of those properties sold for more than their original list price, which typically means sellers received offers from multiple home shoppers.
“Right now we’re seeing increased inventory, but we’re not seeing increased sales yet,” said Lawrence Yun, the NAR’s chief economist.
The U.S. housing market has been mired in a slump dating back to 2022 when mortgage rates began to climb from pandemic-era lows. Existing home sales sank to a nearly 30-year low last year as the average rate on a 30-year mortgage surged to a 23-year high of 7.79%, according to mortgage buyer Freddie Mac.
The average rate has mostly hovered around 7% this year — more than double what it was just three years ago —- as stronger-than-expected reports on the economy and inflation have forced the Federal Reserve to keep its short-term rate at the highest level in more than 20 years.
