“High mortgage rates are causing home sales to remain stuck at cyclical lows,” Yun said. “If the average mortgage rates were to decline to 6%, our scenario analysis suggests an additional 160,000 renters becoming first-time homeowners and elevated sales activity from existing homeowners.”
Record home prices
Home prices surged to another all-time high in June. The median price for existing homes reached $435,300 in June, a 2% increase from last June’s $426,900. It is the 24th consecutive month of year-over-year price increases.
While this is a challenge for homebuyers, Yun notes that it only adds to the record equity people have in their homes.
“The record high median home price highlights how American homeowners’ wealth continues to grow—a benefit of homeownership,” he said. “The average homeowner’s wealth has expanded by $140,900 over the past five years.”
A decrease in housing inventory helped contribute to the price increase. There were 1.53 million units of housing in June, a 0.6% decrease from May, but a 15.9% increase from June 2024. This represents a 4.7-month supply of unsold inventory, up from 4.6 months in May and 4.0 months last year.