U.S. Home Prices Reach Record High Amid Slowing Sales

Why it matters locally: While national home sales declined overall, the South, which includes Florida, saw sales remain unchanged, suggesting continued demand in the state's housing market amidst rising national prices. The increase in national median home prices and mortgage rates will likely impact housing affordability for many Floridians.

WASHINGTON – Sales of previously owned U.S. homes saw a decline in June. Concurrently, a principal measure of home prices climbed, establishing a new record high. This combination of factors has affected the financial accessibility for individuals seeking to purchase a home. Buyers completed 4.16 million home purchases in June on a seasonally adjusted annual rate, according to the National Association of Realtors (NAR). This figure reflects a 3.3% decrease from May's sales pace. It also represents a 18.9% decline compared to June of the previous year. The median price for an existing home sold in June reached $410,200. This marks an all-time high since NAR began tracking the data in 1999. The previous peak occurred in June 2022, when the median price was $409,200. Mortgage rates have also increased, contributing to the current market conditions. The average rate for a 30-year fixed mortgage moved above 7% in recent weeks, according to mortgage buyer Freddie Mac. One year ago, the average rate stood at 5.3%. This increase has influenced the purchasing power of buyers. The number of homes for sale in June remained limited. The inventory of existing homes for sale rose 2.9% from May, reaching 1.08 million homes. However, this figure represents a 13.9% decrease compared to June 2022. At the current sales pace, this inventory would last 3.1 months. Economists generally consider a four-to-six month supply as a balanced market. First-time buyers constituted 28% of all sales in June, a slight decrease from 29% in June 2022. Homes typically remained on the market for 30 days in June, an acceleration from 31 days in May. In June 2022, homes sold, on average, within 14 days. All-cash sales accounted for 26% of transactions in June, rising from 25% in June 2022. Individual investors or second-home buyers, who often purchase with cash, bought 14% of homes in June. This represents a decrease from 16% in June 2022. The West experienced a 5.6% decrease in home sales last month. Sales in the Northeast fell by 4.2%. The Midwest saw a 4.4% decline, while sales in the South remained unchanged. Regionally, median home prices increased in the Northeast, Midwest, and South. The median price in the West decreased from a year earlier.