L
OS ANGELES — Sales of previously occupied U.S. homes slowed in June, reaching their lowest pace since last September as mortgage rates remained high and median sales prices hit a record $435,300. Existing home sales fell 2.7% from May to a seasonally adjusted annual rate of 3.93 million units, according to the National Association of Realtors.

    The housing market has been sluggish since early 2022, when mortgage rates began rising from pandemic-era lows. Home prices have increased annually for 24 consecutive months, reaching record heights. Despite a sharp increase in homes on the market, prices continue to rise due to low inventory levels.

    High mortgage rates are limiting purchasing power and making it difficult for would-be homebuyers, particularly first-time buyers who accounted for just 30% of sales last month, unchanged from May. Historically, they made up 40% of home sales.

    Lawrence Yun, NAR's chief economist, said the second half of the year depends on mortgage rates. If rates were to fall to 6%, it could lead to an additional 500,000 homes sold. However, if rates remain high, small changes in sales and prices are expected.

    The housing market's affordability crunch is keeping many aspiring homebuyers on the sidelines. Home shoppers who can afford to buy at current mortgage rates or pay in cash are benefiting from more properties on the market. The number of unsold homes increased by nearly 16% from June last year, but remains below pre-pandemic levels.

    Homes for sale are staying on the market longer as sales remain sluggish. Properties typically remained on the market for 27 days before selling, up from 22 days in June last year. Some sellers are opting to pull their homes off the market rather than lower prices, with the number of properties taken off the market without selling jumping 47% in May from a year earlier.