Existing home sales slipped 5.4% to an annualized 3.89 million—the lowest level since December 2023—after falling 0.7% in May. That is the fourth straight drop amid high mortgage rates and low affordability, which are undermining home demand. The decline was broad-based with condos/co-ops dropping 7.5% following unchanged readings in April and May, and single-family sales falling a more modest 5.1%, the fourth decline in a row. The larger-than-expected decrease in overall sales pushed the year-ago growth rate down to -5.4%, nearly twice the 2.8% drop in May. Moreover, existing home sales have declined annually for 35 consecutive months.

There was some encouraging data on the inventory front. Total housing inventory in June was 1.32 million, up 3.1% from May and 23.4% higher than a year ago. That equates to a 4.1 months’ supply at the current sales pace, up from 3.7 in the prior period and 3.1 one year ago. The last time unsold inventory was above four months was in May 2020. The rise in inventory exerted a little downward pressure on home price growth. Still, the median existing home price in June was a record high $426,900, a year-on-year increase of 4.1%, down slightly from the 5.2% gain in May.

Bottom Line: The weakness in the housing market outside of home prices is likely to continue until the Fed starts cutting interest rates in September.

Table 1 - United States — Existing Home Sales

(millions of units : a.r.)

Source: BMO Economics, Haver Analytics

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