U.S. Existing Home Sales Fall 2.7% to 9-Month Low Amid High Prices, Rates

U.S. existing home sales fell 2.7% in June to a seasonally adjusted annual rate of 3.93 million, marking the lowest level since late 2024, primarily due to elevated mortgage rates averaging around 6.7% and record-high home prices, which reached a median of $435,300. Despite a slight increase in inventory, the market remains tight, particularly for first-time buyers, whose share of purchases held steady at 30%, below the long-term average. National Association of Realtors chief economist Lawrence Yun attributed the sales decline to years of underbuilding relative to population growth, leading to high prices and limiting affordability. Yun and President Trump both advocated for lower interest rates, with Trump publicly criticizing Federal Reserve Chair Jerome Powell for not reducing rates sooner to stimulate housing demand. The Federal Reserve’s tight monetary policy and high mortgage rates have suppressed buyer activity, especially at lower price points, while all-cash and higher-priced home sales have increased. Analysts suggest that a reduction in mortgage rates to around 6% could potentially boost homeownership by encouraging renters to become buyers and increase sales activity among current homeowners.