US home prices hit another new peak in June amid short supply, while existing home sales fell for the fifth straight month amid the ongoing rise in mortgage rates, according to industry data released Wednesday.
Sales sank 5.4 percent compared to May, toppling to a 5.12 million annual rate, far below what economists were projecting, the National Association of Realtors (NAR) reported.
That was the weakest sales pace since January 2019, excluding the start of the pandemic in 2020, NAR Chief Economist Lawrence Yun told reporters.
After topping $400,000 for the first time ever, the median national home price continued to rise, hitting $416,000 last month, the data showed.
"A combination of higher prices and higher mortgage rates clearly has shifted the dynamics in the housing market," Yun said. "Even people who want to buy are simply priced out, given these affordability challenges."
With inflation soaring and American families struggling to make ends meet, the Federal Reserve has been aggressively raising interest rates to try to cool demand and ease the pressure. But that has put homes out of reach for many.
Separate data from the Mortgage Bankers Association released Wednesday showed demand for home loans fell 6.3 percent last week, in the third consecutive decline.
The Fed is watching the housing market closely for signs that scorching inflation might be easing.
While sales increased for homes above $500,000, NAR said there were large double-digit declines in the lower price categories, reflecting the affordability challenge and the fact rising prices are pushing some homes into higher price buckets.
Yun noted that price increases are slowing, while weakening demand is allowing inventories to build up, reaching 2.7 months' supply in June from just 1.8 in January.
But, he said, even if the housing market returns to something more like normal by year end, with "more manageable" price increases, "I don't foresee a nationwide price decline."
Sales fell 14.2 percent compared to June 2021, while the median price is up 13.4 percent, according to the data.
Existing home sales make up 90 percent of the real estate market.