Sales fell in June as the median home price climbed to an all-time high of $440,600
The US housing market retreated in June, with existing home sales falling for the first time in three months even as prices scaled a new peak, the latest data from the National Association of Realtors (NAR) showed Thursday.
Sales of previously owned homes declined 2.4% from May to a seasonally adjusted, annualized rate of 4.09 million units — defying analyst expectations of a modest monthly gain.
Year over year, June sales were still 2.8% above the same period in 2025, offering a measure of perspective on how far the market has come from its prolonged lows.
But the month-over-month pull-back underscores the fragility of a recovery that has struggled to gain consistent footing against persistent affordability headwinds.
Because the NAR counts sales at closing, June's figures mostly reflect contracts signed in April and May, a period when the 30-year fixed mortgage rate was still trending higher following its climb in early March 2026 after the outbreak of the Iran conflict. That rate stood at 6.43% as of July 2, according to Freddie Mac's Primary Mortgage Market Survey, roughly 45 basis points above its pre-conflict level.
High mortgage rates are expected to keep the US housing market subdued through at least the remainder of 2026, with the Mortgage Bankers Association (MBA) projecting the 30-year rate will hold in the 6.1%–6.3% range for the rest of the year.
"The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions," said Lawrence Yun, NAR's chief economist.
"However, job gains — more than half a million since the beginning of the year — will continue to provide support for the housing market."
Mortgage application volume held essentially flat in the week ending June 26, inching up just 0.04% on a seasonally adjusted basis, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.https://t.co/h4K8lX93Kl
— Mortgage Professional America Magazine (@MPAMagazineUS) July 3, 2026
Record prices compound inventory strain
The median price of an existing home sold in June hit $440,600, a 1.8% increase from a year earlier and the highest level NAR has ever recorded.
June is historically the strongest month for both prices and sales, but this year's record arrives at a moment when many would-be buyers are already at the outer limits of what they can afford.
Available supply remains the central constraint. Inventory at the end of June came in at 1.56 million units, down 0.6% from May, though 1.3% ahead of June 2025.
At the current sales pace, that represents 4.6 months of supply, still well short of the six-month threshold widely associated with a balanced market. With stock scarce, sellers continue to hold pricing power even as buyer demand softens.
"Progress on long-term housing affordability could be hampered if inventory growth continues to stall," Yun said.
"Without consistent gains in inventory, home prices can accelerate. It is critical to introduce more supply to the market to widen the opportunity for homeownership."
The picture is not uniform across price tiers. Sales of homes priced below $100,000 fell 1.7% from a year ago, while transactions in the $100,000–$250,000 range were barely changed.
At the upper end, homes priced between $750,000 and $1 million posted roughly 14% year-over-year sales growth, and properties above $1 million were up 18%.
The divergence reflects a market where wealthy and cash-flush buyers continue to transact with relative ease while entry-level and first-time purchasers bear the heaviest affordability burden. US housing affordability is improving but regional conditions vary considerably, and the gains are not evenly distributed.
First-time buyers edge higher as cash deals recede
Despite the challenging conditions, first-time buyers made up 33% of June sales, up from 30% a year ago. That's a sign that some buyers at the entry level are pushing through, even if the 40% share economists typically associate with a healthy market remains a distant target.
The share of all-cash purchases fell to 25% from 29% in June 2025, a shift that reduces the competitive disadvantage for buyers relying on financing.
The median number of days on market rose to 28 from 27 a year ago, and distressed sales, including foreclosures, slipped to 2% from 3%, reflecting the underlying financial resilience of most current homeowners.
Regionally, sales declined in the Midwest, South, and West on a month-over-month basis. Only the Northeast recorded a gain.
For brokers, the June data arrives just weeks after May's stronger-than-expected reading. Existing home sales surged 3.2% in May to their highest level since December 2025, a rebound that June's figures have now partially reversed.
A bipartisan housing affordability bill passed by Congress — which includes provisions to restrict single-family homeownership by large investment firms and accelerate environmental reviews for construction projects — could eventually ease some of that pressure.
However, President Donald Trump has declined to sign the legislation until a separate voting bill is enacted, leaving its impact on the supply picture uncertain for now.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
