Washington (Reuters) – Sales of existing houses fell to a hollow of nine months in June, because higher mortgage rates and economic uncertainty maintain potential buyers on the margins, highlighting an increase in the housing market.
The report of the National Association of Realtors Wednesday was added to the weakness of the unified construction last month by suggesting that residential investment, which includes the construction of houses and sales of houses thanks to the broker commissions, probably remained an obstacle to the economy in the second quarter.
The housing market is the segment of the economy most sensitive to interest rates. Although housing represents less than 5% of the gross domestic product, it has a greater economic imprint thanks to the purchases of furniture and household appliances and other activities. There are concerns, a prolonged drop could manage in the wider economy.
“The housing market has concluded a lere in the first half of 2025 on a drop in high mortgage rates and the sweetness of the construction of the labor market on demand,” said Ben Ayers, principal economist in Nationwide. “Sales activity should continue to be low during the summer and fall, as many tenants choose to wait from lower rates and a more stable economic environment.”
Home sales dropped 2.7% last month for an annual rate seasonally adjusted by 3.93 million units, the lowest level since September 2024, the NAR said. Economists interviewed by Reuters had planned house networks at a rate of 4.00 million units. Sales were unchanged on one basis from one year to the next in June.
The monthly sales of houses have decreased in the northeast, the Midwest and the densely populated south, but they increased to the west.
Government data last week showed that the construction of unifamilial houses fell to an 11 -month hollow in June while future construction permits have decreased by more than two years.
Thursday data should show a moderate increase in sales of new houses for June, said a Reuters survey.
The average rate of the fixed rate mortgage of 30 -year -old popular rate has oscillated just under 7% this year after the Federal Reserve has interrupted its interest rate reductions in the concerns that the protectionist trade policy of President Donald Trump would stir inflation.
Trump, who has deteriorated the president of the Fed, Jerome Powell, not to have lowered the borrowing costs, said on Tuesday: “People are unable to buy a house because this guy is numbness. He keeps the prices too high and the fact probably for political reasons.”
The Fed should keep its reference interest rate during the range of 4.25% to 4.50% at the end of its political meeting next week. The American central bank reduced rates three times in 2024, the last move to come in December.
“The Fed will not give up everything and rush to save the housing market, only one sector of the economy,” said Carl Weinberg, chief economist at High Frequency Economics.
Trump floated by eliminating capital gains tax on house sales to support the housing market.
Low buyer’s request
Low sales, especially in the metropolitan region of Washington, DC, which was the hardest affected by the Trump administration’s profound expenditure cuts and mass fire of federal government workers, increased the supply of housing.
This development has slowed down the rate of housing prices growth, with training effects on household wealth that could hinder consumers’ spending.
The inventory of existing houses in June increased by 15.9% to 1.53 million units compared to a year ago. At the rate of June sales, it would take 4.7 months to exhaust the current inventory of existing houses, against 4.0 months a year ago.
An offer of four to seven months is considered a healthy balance between supply and demand. Balance is however a combination of low inventories and sales activities.
However, while the national supply remains below 1.8 million to 1.9 million units before the COVVI-19 pandemic, many regions, including Washington, DC, Idaho, Nebraska, Texas and Florida, have experienced a sharp increase in stocks. But the supply remains rare in certain markets like New York.
“The reduction in labor demand has made the search for a more difficult new job, which could lead to both a lower demand and an increase in forced sales,” said Charlie Dougherty, principal economist at Wells Fargo.
The median price of existing houses last month increased by 2% compared to one year to a record summit of $ 435,300.
Redfin data has shown that national housing prices increased by 3.4% on an annual basis in June, the smallest gain in two years. Washington, DC led moderation, the prices of houses increasing by 2.9%, a significantly decreasing the annual growth rate of 10.9% recorded in March.
Thirty of the 50 metropolitan zones recorded a drop in prices for houses on a basis of months in June. The annual housing prices have decreased in Tampa, Austin and Dallas.
The NAR report showed that the properties had generally remained on the market for 27 days last month, against 22 days a year.
The first buyers represented 30% of sales, against 29% a year ago. Economists and real estate agents say that a 40% share is necessary for a robust housing market. Sales of all cases constituted 29% of transactions, against 28% a year ago.
Despite stress in certain regions, forced sales remain very low. Sales in difficulty, including seizures, represented 3% of transactions, increasing by 2% a year ago. During the great recession of 2007-2009, sales in difficulty represented 30% to 40% of transactions.
“We are looking for sales to move laterally from the 2025 scale before recovering in 2026 while the rate drops by the Fed take place seriously,” said Nancy Vanden Houten, main economist at Oxford Economics.
(Report by Lucia Mutikani; edition by Paul Simao)
