Existing-home sales declined by 2.7% from May 2025 but held steady compared to one year ago. Mortgage rates and high home prices continue to dissuade potential buyers

by Lillian Dickerson July 23, 2025

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Existing-home sales continued their downward trend in June from the previous month while holding steady on an annual basis, reflecting a continued resistance by homebuyers to stubborn mortgage rates, the National Association of Realtors (NAR) reported on Wednesday.

Existing-home sales declined by 2.7 percent from May 2025 and remained the same from levels one year ago at a seasonally adjusted annual rate of 3.93 million.

The findings come on the heels of a report released by Redfin on Tuesday showing that home price growth had settled to a two-year low in response to sluggish buyer activity.

Supply and demand impacts on home prices paired with high mortgage rates continue to have an effect on home sales, NAR Chief Economist Lawrence Yun said.

“Multiple years of undersupply are driving the record-high home prices,” Yun said in a statement. “Home construction continues to lag population growth. This is holding back first-time homebuyers from entering the market. More supply is needed to increase the share of first-time homebuyers in the coming years even though some markets appear to have a temporary oversupply at the moment.

“High mortgage rates are causing home sales to remain stuck at cyclical lows,” Yun continued. “If the average mortgage rates were to decline to 6 percent, our scenario analysis suggests an additional 160,000 renters becoming first-time homeowners and elevated sales activity from existing homeowners.”

Total housing inventory in June was down 0.6 percent from May and up 15.9 percent on an annual basis to 1.53 million units, NAR reported, which represents a 4.7-month supply, up from 4 months in June 2024.

Even as inventory continues to grow on an annual basis, leading some to say the country is entering into a “buyer’s market,” Navy Federal Credit Union Chief Economist Heather Long said that’s a bit of a misnomer.

“This spring we have seen a surge in homes listed for sale, but prospective buyers aren’t interested at these prices and mortgage rates,” Long said in a statement emailed to Inman. “It’s a ‘buyer’s market’ with all of the available inventory and lack of competition, but it’s still too unaffordable for most to buy. The real estate market will remain frozen for now, but there is hope for 2026.”

The median existing-home sales price in June across all housing types was $435,300, up 2 percent year over year and a record high for the month of June. The annual growth marked the 24th consecutive month of year over year price increases.

Single-family home sales declined by 3 percent from the previous month to a seasonally adjusted annual rate of 3.57 million, which was up 0.6 percent on an annual basis. The median home price for single-family home was $441,500, up 2 percent year over year.

The Midwest and South experienced some modest annual growth in existing-home sales as sales in the Northeast and West contracted by 4.2 percent and 4.1 percent year over year, respectively.

With the labor market in a strong position, Yun said home sales may increase in the second half of the year — if mortgage rates go down a bit.

“Expanding participation in the housing market will increase the mobility of the workforce and drive economic growth,” Yun said. “If mortgage rates decrease in the second half of this year, expect home sales to increase across the country due to strong income growth, healthy inventory, and a record-high number of jobs.”

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