United States home sales have once again become weak after showing some signs of a rebound in May.
Two months ago, existing home sales in the U.S. hit a five-month low, then this May showed signs of rebound before declining 2.7% in June to an annual rate of 3.93 million, according to Mortgage News Daily.
This leaves activity just above the recent slow and 25% below long-term norms, but remains unchanged from June 2024.
Housing sales have been hovering at 75% of pre-pandemic norms for the past three years.
“The record high median home price highlights how American homeowners’ wealth continues to grow — a benefit of homeownership,” NAR Chief Economist Lawrence Yun said.
“High mortgage rates are causing home sales to remain stuck at cyclical lows.”
Mortgage rates have remained high and steady for the past seven months at an average of 6.77%.
At the end of June, supply continues to gain with 1.53 units for sale at the end of June, representing a 15.9% increase year-over-year.
The median house price in June increased 2% year-over-year to US$435,300, which is a record high for June. This is the 24th consecutive month of an annual increase.
“Multiple years of undersupply are driving the record-high home prices. Home construction continues to lag population growth. This is holding back first-time home buyers from entering the market,” Yun said, noting also that the average homeowner’s wealth has increased by $140,900 over the past five years.
Homes on the higher end of the spectrum outperformed on the market, with homes priced below US$100,000 dropping 5% annually and those priced between US$100,000 and US$250,000 rising 5%.
Homes priced above US$1 million saw the highest increase of 14%.
Houses are also spending more time on the market with an average of 27 days compared to 22 days last June. Higher-priced homes above US$500,000 are selling the quickest.
First home buyers represent 30% of the market, which is below the 40% that this demographic normally makes up.
Cash sales have increased from 20% pre-pandemic to 29% of sales.
Homes listed received 2.4 offers, a decrease from 2.5 last month and 2.9 a year earlier.
