US home sales fade in June as national median sales price hits an all-time high of $435,300

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  House and Home on Sun, Aug 24th, 2025 by WSB Radio

US Home Sales Fade as Mortgage Rates Rise, Inventory Stays Tight

Existing‑home sales dipped in March while new‑home sales surged; the market remains resilient but affordability continues to slip.

In a headline‑grabbing release from the National Association of Realtors (NAR), U.S. existing‑home sales fell for the first time in consecutive months, while newly‑built homes experienced a sharp uptick. The drop comes amid persistent supply shortages and higher mortgage rates that are cooling the market but not extinguishing demand.

Existing‑Home Sales Slip

According to the NAR’s data released on April 4, 2024, existing‑home sales declined 1.5 % month‑over‑month to 3.53 million units in March, a drop from the 3.58 million reported in February. This was the first consecutive decline since January, underscoring a gradual slowdown in the traditional market.

The median sale price for existing homes also slipped 1.3 % to $356,900. The price decline, while modest, reflects the cumulative impact of tightening affordability. Mortgage rates have averaged 7.4 % on 30‑year fixed‑rate loans for the month, up from 7.1 % a month earlier, and still higher than the 3–4 % range that saw the market boom in 2021 and 2022.

“The slowdown is largely driven by the higher cost of borrowing,” said NAR President and CEO Kelley O’Neill in a statement. “While supply remains constrained, buyers are being priced out of many desirable markets.”

New‑Home Sales Surge

In contrast, new‑home sales posted a 9.9 % increase to 672,000 units in March, a record high for the month. The surge is fueled by an expanding pool of buyers who are turning to new construction as an alternative to existing‑home inventory that is increasingly scarce.

The median price of newly‑built homes rose 2.5 % to $368,300, indicating that builders are still managing to command premium prices despite the higher borrowing costs. New‑home construction overall, however, remains below the historic highs of 2022, partly due to ongoing supply chain constraints and rising lumber costs.

The U.S. Census Bureau’s monthly report on new residential construction, which the WSBRadio article links to, corroborates these figures and highlights a modest rebound in housing starts following a dip in early 2024.

Inventory and Affordability

Inventory remains a critical factor shaping the market. Existing‑home inventory stood at a 1.8‑month supply in March, a slight uptick from 1.6 months in February but still below the 3‑month “normal” level. The shortage is concentrated in high‑demand urban cores, where inventory has plummeted to single‑digit months.

Housing affordability, measured by the Federal Housing Finance Agency’s Affordability Index, slipped to 60.5 in March, the lowest level since 2017. The index indicates that a typical family would need to earn 40 % more to qualify for a conventional mortgage at current interest rates.

Market Outlook

While the recent dip in existing‑home sales signals a cooling, NAR’s economic forecasts remain cautiously optimistic. The association projects 3.6 million existing‑home sales for 2024, a modest 4 % decline from the 2023 total. New‑home sales are expected to remain strong, with a projected 5 % year‑over‑year increase driven by builders’ ability to adjust pricing and marketing strategies.

The Federal Reserve’s current stance—maintaining a 5 % policy rate and signaling no cuts this year—will likely keep mortgage rates above the 7 % threshold for the foreseeable future. This, in turn, will continue to strain affordability for first‑time buyers and could further depress the volume of existing‑home sales.

Additional Resources

The WSBRadio article references the NAR’s official press release, which provides a detailed breakdown of sales by region, price segment, and buyer demographics. It also links to the U.S. Census Bureau’s New Residential Construction report, offering insights into the supply side of the market, including housing starts, permits, and building permits.

Other referenced sources include Bloomberg and CNBC coverage of the Federal Reserve’s monetary policy decisions, which contextualize the macroeconomic backdrop driving mortgage rates.

Takeaway

In summary, U.S. home sales are experiencing a subtle shift: traditional existing‑home sales are slipping in the face of rising rates and low inventory, while new‑home sales are climbing, supported by a resilient builder sector and a continued demand for fresh housing stock. The market remains tight, affordability is eroding, and buyers and sellers alike must navigate a landscape where interest rates are high, inventory is limited, and the economic outlook is uncertain.