By Nicole Friedman and David Harrison
The median existing home price hit another record in June, rising to $416,000, and sales declined for the fifth straight month as higher interest rates pushed more buyers out of the market.
Sales of previously owned homes fell 5.4% in June from the prior month to a seasonally adjusted annual rate of 5.12 million, the weakest rate since June 2020, the National Association of Realtors said Wednesday. June sales fell 14.2% from a year earlier.
The national median home price continued to climb, rising 13.4% in June from the previous year and increasing from a revised $408,400 in May.
Despite the higher prices, homes are still selling quickly. Properties remained on the market 14 days in June, the fewest in records going back to 2011. The inventory of homes for sale has increased but remains low with a three-month supply of unsold homes. Total inventory at the end of June stood at nearly 1.26 million units, a 9.6% increase from May.
"A combination of higher prices and higher mortgage rates have clearly shifted the dynamics in the housing market," said Lawrence Yun, NAR's chief economist. "People who want to buy are simply priced out given the affordability challenges."
Economists surveyed by The Wall Street Journal had expected a 0.9% monthly decline in sales of previously owned homes, which make up most of the housing market.
The average rate on a 30-year fixed-rate mortgage was 5.51% in the week ended Thursday, up from 2.88% from a year earlier, according to housing-finance agency Freddie Mac. Higher rates are weighing on demand. Mortgage applications fell for the third week in a row, hitting the lowest level since 2000, according to a separate release Wednesday by the Mortgage Bankers Association.
"Buyers can't figure out what is the right price," said Mark Zandi, chief economist at Moody's Analytics. "Sellers are very reluctant to give up" on the price they expected to sell for a few months ago, he said.
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(END) Dow Jones Newswires
July 20, 2022 10:22 ET (14:22 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.