U
S home sales slowed in June to their lowest pace since September, as mortgage rates remained high and median prices reached a record $435,300. Existing home sales fell 2.7% from May to a seasonally adjusted annual rate of 3.93 million units, missing analysts' estimates.

    The housing market has been struggling since early 2022, when rising mortgage rates began to cool the market. Last year's sales were the lowest in nearly three decades. Despite an increase in homes for sale, prices continue to rise due to a lack of inventory and high demand from buyers who can afford current rates or pay cash.

    The National Association of Realtors' chief economist, Lawrence Yun, attributes the slow sales to high mortgage rates, which add hundreds of dollars per month to borrowers' costs. If rates were to drop to 6%, Yun estimates that an additional half-million homes would be sold.

    First-time homebuyers, who typically make up 40% of home sales, accounted for only 30% last month, as affordability issues keep them on the sidelines. Meanwhile, buyers who can afford current rates or pay cash are benefiting from more properties on the market. The inventory of unsold homes increased by nearly 16% from June last year but remains below pre-pandemic levels.

    Homes are staying on the market longer, with an average of 27 days in June before selling, up from 22 days a year ago. Yun notes that the second half of the year will depend on what happens to mortgage rates, which have remained around 7% so far this year.