U.S. existing home sales fell by 2.7% in June, coming in below economists’ forecasted rate of 4.00 million units, signaling potential challenges in the housing market recovery.
The big picture: Reports indicate that the average rate for a 30-year fixed-rate mortgage has hovered just below 7% due to the Federal Reserve’s hesitance in lowering borrowing costs amid concerns of inflation.
- President Donald Trump criticized Fed Chair Jerome Powell for maintaining high rates, suggesting it hinders people’s ability to purchase homes, potentially impacting the housing market’s recovery.
- The slowdown in housing sales has led to a record high median home price of $435,300, with an increase in existing home inventory by 15.9% from the previous year.
Go deeper: The median existing home price rose by 2% annually, and properties are now staying on the market for an average of 27 days, lengthening the time homes remain unsold compared to the previous year.
- With first-time buyers only constituting 30% of sales, below the desired 40% to maintain a robust housing market, and all-cash sales making up 29% of transactions, there are concerns about the market’s strength.
- Distressed sales, including foreclosures, saw a slight increase to 3% of transactions, adding to the challenges faced within the housing market.
