U.S. existing home sales fell more than expected in June as the median house price rose 4.1 percent to a record high of $426,900 from a year ago. However, improving supply and declining mortgage rates offered hope that activity could rebound in the next few months. U.S. home sales declined 5.4 percent last month to 3.89 million units, the lowest level since December.
The National Association of Realtors reported a fourth consecutive monthly decline in home resales in June, raising expectations that the housing market contracted in the second quarter after supporting economic growth in Q1.
Despite U.S. home prices rising to a record high for the second consecutive month, the pace of increase has slowed, with supply at almost a four-year high. Home resales, which account for a large portion of U.S. home sales, declined 5.4 percent annually in June.
Mortgage rates drop
The average rate on a 30-year fixed-rate mortgage dropped to a four-month low of 6.77 percent last week, down from 6.89 percent the prior week and matching the average during the same period in 2023, data from Freddie Mac showed. It has eased from a six-month high of 7.22 percent in early May amid hopes that the Federal Reserve will cut interest rate in September.
Read: U.S. single-family home sales at six-month low in May as supply hits over 16-year high
Midwest sees largest sales decline
U.S. home sales declined 5.9 percent in the South, 8 percent in the Midwest, 2.1 percent in the Northeast, and 2.6 percent in the West. Meanwhile, housing inventory increased by 3.1 percent to 1.32 million units last month, the highest since October 2020. Supply rose 23.4 percent annually in June.
At June’s sales pace, it would take 4.1 months to exhaust the current inventory of existing homes in the U.S. That was the highest level since May 2020 and was up from 3.1 months in June last year. Markets view a four-to-seven-month supply as a healthy balance between supply and demand.
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