Facing the dual pressures of persistently high mortgage rates and record-breaking home prices, buyer sentiment remains subdued, leading to a decline in US home sales for June. This signals a weak finish to the traditionally busy spring selling season.
Data released on Thursday shows that seasonally adjusted existing home sales in June occurred at an annual rate of 4.09 million units, a drop of 2.4% from May and significantly below market expectations. Economists had broadly anticipated a 0.7% monthly increase.
The June data represents a reversal in market momentum, following an unexpected and significant surge in existing home sales during May.
Due to inflationary pressures and rising mortgage rates linked to the Iran conflict, major institutions have revised down their full-year 2026 forecasts for the US housing market. The latest projection from real estate platform Realtor.com anticipates full-year existing home sales of 4.10 million units, a slight downward revision from the 4.13 million units forecast last December, though this still represents a 1% increase over the projected total for 2025.
According to the data, the median price for an existing home sold in June rose to $440,600, representing a 1.8% increase compared to the same period last year.
The chief economist for the association commented that the sensitivity of monthly sales figures to minor fluctuations in mortgage rates underscores just how highly responsive buyer affordability is to interest rate changes.
The US housing market has been in a prolonged slump for several years. A sharp rise in mortgage rates during 2022 definitively ended the home-buying frenzy witnessed during the COVID-19 pandemic.
Early in 2026, the 30-year fixed mortgage rate briefly dipped below 6%, sparking hopes for a market recovery. However, following the outbreak of the Iran conflict, mortgage rates surged rapidly and have remained volatile. Recent data shows the average rate for a 30-year fixed mortgage stood at 6.43% last week.
A significant number of homeowners who secured ultra-low mortgage rates in earlier years are reluctant to sell, as doing so would mean giving up their favorable loans. This has directly contributed to a severe shortage of listings in the existing home market. The scarcity of available properties is, in turn, pushing prices higher, substantially increasing the difficulty for first-time homebuyers to enter the market.
Furthermore, a generally weak confidence among the American public regarding the broader macroeconomic outlook is also dampening willingness to make major fixed-asset purchases like homes.
Despite the monthly decline in June, the market shows some marginal improvement compared to the previous year. Existing home sales in June were 2.8% higher than a year ago. Inventory levels have increased slightly, and the association also notes that wage growth for residents has now outpaced home price appreciation. Even with mortgage rates at elevated levels, this pent-up demand from first-time buyers continues to provide some underlying support to the market.
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