Housing market ‘purgatory’ for existing home sales as activity falls to lowest level in 9 months
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"No matter how you look at it, this is an unhealthy housing market," ResiClub's Lance Lambert told Fortune Intelligence.
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real estate
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July 28, 2025
03:30 PM
Fortune
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Real Estate·HousingHousing market ‘purgatory’ for existing sales as activity falls to lowest level in 9 monthsBy Nick LichtenbergBy Nick LichtenbergFortune Intelligence EditorNick LichtenbergFortune Intelligence EditorNick Lichtenberg is Fortune Intelligence editor and was formerly Fortune's executive editor of global news
SEE FULL BIO The housing market's purgatory, as seen in existing sales, considering recent developments
However, Getty ImagesU, considering recent developments
On the other hand, Existing sales fell sharply in June 2025, dropping to their lowest level in nine months as elevated mortgage rates and record-high prices continued to sideline many spective buyers
According to the National Association of Realtors (NAR), existing sales slipped 2. 7% from May to a seasonally adjusted annual rate of 3. 93 million transactions, exceeding analysts’ expectations for a more modest decline
Compared to last year, sales were flat overall, with concentrated declines in several regions
The housing market is traditionally busiest in spring, but this year’s key buying season ved lackluster (remarkable data)
The month-over-month decline largely reflected affordability challenges: mortgage rates hovered close to 7% throughout April and May, when most June closings would have entered contract. “Existing sales have been in purgatory since mortgage rates spiked in 2022,” Lance Lambert, editor-in-chief of Resi, told Fortune Intelligence
In contrast, “Some of that’s because strained affordability n many is making it harder for sellers to find a buyer at their asking price—which is also why active inventory is rising
And some of it is because many would-be sellers, who’d to sell and buy something else, either can’t afford that next payment or don’t want to part with their lower mortgage rate and payment
On the other hand, No matter how you look at it, this is an unhealthy housing market (quite telling)
At the same time, ” Skyhigh prices On a nationwide basis, prices climbed to an all-time high, underpinning the market’s affordability squeeze, in today's market environment
The median price for existing s reached $435,300 in June, up 2% from the same month a year earlier and marking the 24th consecutive month of yearly price gains
Furthermore, NAR Chief Economist Lawrence Yun sounded an optimistic tone this staggering climb: “The record high median price highlights how American owners’ wealth continues to grow—a benefit of ownership, considering recent developments
The average owner’s wealth has expanded by $140,900 over the past five years, in today's financial world. ” Despite weak sales, inventory is slowly rebuilding: 1. 53 million s were listed for sale at the end of June, up nearly 16% from a year ago—the highest level in years—though still 0. 6% lower than in May due to seasonal factors
Moreover, This puts the market’s unsold inventory at a 4. 7-month supply, matching pre-pandemic norms and up from 4
However, 0 months a year prior
Regional dynamics varied
Sales dropped in the Northeast, Midwest, and South, but edged higher in the West, with year-over-year changes mirroring these splits
Single-family sales slipped 3%, while sales of condominiums and co-ops were stable compared to May but down 5
Meanwhile, 3% against June 2024
One positive for buyers: more supply and slightly longer time on market
Com reported that active inventory for June rose for the 20th straight month, climbing nearly 29% year over year to 1
In contrast, 08 million s, and the average spent 53 days on market, five days longer than a year earlier
However, these gains are offset by persistent undersupply when compared to the pre-pandemic market, and price cuts became more common, with nearly 21% of listings experiencing downward adjustments—the highest June since 2016
Conversely, “Multiple years of undersupply are driving the record high price,” Yun said, noting that construction continues to lag population growth and is holding back first-time buyers. “If the average mortgage rates were to decline to 6%, our scenario analysis suggests an additional 160,000 renters would become first-time owners and a boost in activity from existing owners,” Yun added (an important development)
If mortgage rates decrease in the second half of this year, Yun said, he expects sales to increase across the country due to strong income growth, healthy inventory, and a record-high number of jobs. ” For now, though, it’s a familiar story of peak prices and affordability the main obstacle for would-be buyers in the U
For this story, Fortune used generative AI to help with an initial draft
An editor verified the accuracy of the information before publishing (quite telling), considering recent developments
Meanwhile, Introducing the 2025 Fortune 500, the definitive ranking of the biggest companies in America (quite telling)
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