Housing Market Headed For Another Dismal Year

In an already sluggish year for the housing market, June existing-home sales plunged to their lowest level since September 2024.

The current market reflects the effects of years of underbuilding.

At the same time, mortgage rates ticked up again and home prices climbed to a record high—further sidelining potential buyers, according to the National Association of Realtors (NAR), Shaina Mishkin and Janet H. Cho reported for Barron’s Daily.

Existing-home sales fell to a seasonally adjusted annual rate of 3.93 million, down 2.7% from May’s revised rate and flat compared to June 2024. Both figures missed analysts’ forecasts.

The average rate on a 30-year fixed mortgage rose slightly to 6.75% and has remained in a narrow range throughout the year. While buyers are gaining negotiating power, affordability remains a significant obstacle.

The median existing-home price rose 2% year over year to $435,300—the highest on record since at least 1999. NAR Chief Economist Lawrence Yun said the current market reflects the effects of years of underbuilding.

There were 1.53 million homes for sale or under contract in June, 0.6% fewer than in May but 15.9% more than in June 2024, according to NAR.

Homes are spending more time on the market, and the current supply of homes amounts to 4.7 months—also the highest since 2016. Mortgage purchase applications rose 22% year over year for the week ending July 18, the Mortgage Bankers Association reported.

If mortgage rates dropped to 6%, NAR estimates that 160,000 more renters could become first-time homebuyers, which would likely spur more sales from current homeowners as well, Yun said.