US Existing Home Sales Slip as Prices Hit Record High

The National Association of Realtors reported that the June sales pace fell short of the 4.20 million units predicted by analysts. Inventory of previously owned homes slipped 0.6% to 1.56 million units, leaving supply significantly below pre-pandemic levels. Nancy Vanden Houten, lead U.S. economist at Oxford Economics, noted that affordability challenges remain acute for first-time buyers and lower-income households, while upper-income buyers continue to dominate the market.

Rising mortgage rates, exacerbated by geopolitical tensions in the Middle East, have discouraged existing homeowners from listing their properties. Many are locked into fixed-rate mortgages below 5% and are unwilling to trade those terms for current higher rates. Meanwhile, a separate Labor Department report indicated the labor market remains in a steady state, with initial unemployment claims holding at 215,000 for the week ended July 4. Despite this stability, the Federal Reserve has signaled concerns that ongoing geopolitical uncertainty could eventually lead firms to curb hiring or begin layoffs.