U.S. home prices hit an all-time high as sales slow and mortgage rates rise

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Sales of previously occupied U.S. homes slowed in June, but a key measure of home prices climbed to an all-time high, adding to prospective homebuyers’ affordability challenges.

Existing home sales fell 2.4 per cent last month from May to a seasonally adjusted annual rate of 4.09 million units, the National Association of Realtors said Thursday. Sales rose 2.8 per cent compared with June last year.

The latest sales tally fell short of the roughly 4.21 million pace economists were expecting, according to FactSet.

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Home sales have been mostly hovering close to a 4-million annual pace going back to 2023, far short of the historic norm that is closer to 5.2-million.

Sales have remained sluggish as mortgage rates have mostly trended higher in the months since the war between the U.S. and Iran started, fueling expectations of higher inflation amid surging crude oil prices. Still, mortgage rates remain below where they were a year ago.

Despite the lackluster sales, home prices continued to rise nationally last month. The U.S. median sales price increased 1.8 per cent in June from a year earlier to US$440,600, an all-time high on data going back to 1999, NAR said. Home prices have risen on an annual basis for 36 months in a row.

“Without a doubt, the affordability is a major challenge for people who want to become homeowners, which is the reason why we need more supply,” said Lawrence Yun, NAR’s chief economist.

The U.S. housing market has been in a slump since 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied U.S. homes were essentially flat last year, stuck at a 30-year low.

Through the first half of this year, seasonally adjusted sales of existing U.S. homes are up only 0.7 per cent compared to the same period in 2025.

Many of the homes purchased last month likely went under contract in April and May, when the average rate on a 30-year mortgage ranged from 6.23 per cent to 6.53 per cent -- the highest level going back to late August, according to mortgage buyer Freddie Mac.

Alex Veiga, The Associated Press