The housing market is getting so weak that it’s poised to become a significant drag on overall economic growth
U.S. existing home sales saw a steep decline in June 2025, falling to their lowest point in nine months as elevated mortgage rates and record-setting home prices continued to push many potential buyers to the sidelines. Data from the National Association of Realtors (NAR) showed that sales dropped 2.7% from May, reaching a seasonally adjusted annual pace of 3.93 million transactions—worse than analysts had forecast, who had anticipated a smaller dip. Compared to a year earlier, overall sales were essentially flat, though some regions saw sharper declines.
While spring is typically the peak season for home buying, this year’s activity during that period fell short. The monthly decline was primarily driven by affordability issues: Mortgage rates hovered near 7% throughout April and May—when the majority of homes closing in June would have gone under contract.
“Existing home sales have been in purgatory since mortgage rates spiked in 2022,” said Lance Lambert, editor-in-chief of ResiClub, speaking to Fortune Intelligence. “Affordability strains are making it harder for sellers to find buyers willing to meet their asking price—one reason why active listings are increasing. Meanwhile, many homeowners who might otherwise list their homes are either unable to afford their next mortgage or unwilling to give up their current low-rate loans. However you frame it, this is not a healthy housing market.”
Record-Breaking Prices
National home prices hit a new high in June, further squeezing affordability. The median price of existing homes climbed to $435,300, up 2% year over year and marking the 24th straight month of annual price gains. Despite the pressure this places on buyers, NAR chief economist Lawrence Yun emphasized the upside for owners: “The record-high median home price highlights how American homeowners’ wealth continues to grow—a benefit of homeownership. The average homeowner’s wealth has expanded by $140,900 over the past five years.”
Though sales activity remains subdued, inventory is gradually rebuilding. At the end of June, 1.53 million homes were listed for sale, nearly 16% higher than the same time last year—the highest number in several years—but still 0.6% below May’s total due to typical seasonal trends. This equates to a 4.7-month supply of unsold inventory, returning to pre-pandemic norms and up from 4.0 months in June 2024.
Regional Variations and Home Types
Sales declined across the Northeast, Midwest, and South, while the West saw a slight uptick. Year-over-year shifts echoed these regional differences. Single-family home sales dropped 3% from the previous month, while condo and co-op sales held steady compared to May but were down 5.3% from June of last year.
Buyers did see one modest advantage: more available listings and slightly longer time on market. According to Realtor.com, active inventory rose for the 20th consecutive month in June, up nearly 29% year over year to 1.08 million homes. The average home spent 53 days on the market—five days longer than one year prior.