Topline
Sales of existing homes slid 2.7% in June, according to data from the National Association of Realtors, which reported a median sales price of $435,000 for homes that same month—their highest price ever.
Home sales slid 2.7% month-to-month. (Photo by PATRICK T. FALLON/AFP via Getty Images)
Key Facts
The 2.7% decrease in sales was recorded month-to-month, translating to an annual rate of 3.93 million home sales in the U.S., on a seasonally adjusted basis.
NAR Chief Economist Lawrence Yun attributed the slump in home sales to high mortgage rates.
Though the decrease in month-to-month sales was notable, there was no change in sales compared to the same time last year.
The median existing-home price reached $435,000 in June, the NAR reported, a record high that marks the 24th consecutive month of year-over-year price hikes.
Yun said years of undersupply are driving the record prices, noting the home construction that lags behind population growth is “holding back” first-time homebuyers from joining the market.
Where In The U.s. Are Home Sales Decreasing The Most?
Month-to-month sales decreased by a whopping 8% in the Northeast, followed by a 4% decrease in the Midwest and a 2.2% slide in the South. However, home sales managed to increase in the West, jumping 1.4% in June, according to NAR.
Where In The U.s. Are Median Home Prices The Highest?
The West, where the median existing-home price reached $636,100 in June, a 1% increase from the same time last year. Homes in the Northeast had a median price of $543,300, while prices reached $374,500 in the South and $337,600 in the Midwest.
Tangent
While the rise in median home prices has hindered first-time home buyers, the jump represents the existing homeowners’ growing wealth, which has increased by $140,900 in the past five years, according to NAR.
Key Background
The housing shortage that has hindered the first-time homebuyer market is rooted in several years of underbuilding following the 2008 financial crisis and rising demand from millennials, according to the U.S. Chamber of Commerce, which added high mortgage rents and rents have worsened the shortage. The business organization said the rate of homebuilding has been impacted by lengthy permitting processes and “outdated” zoning regulations, as well as increased construction costs. It also noted President Donald Trump’s tariff policies could further drive up the cost of essential homebuilding materials and contribute to higher construction expenses.
Further Reading
Trump’s New Tariffs Could Cost Households $2,400 This Year, Analysis Finds (Forbes)
This is a developing story. Check back for updates.