A home in Los Angeles, California, USA, Sunday, July 13th, 2025. Like the wider US markets, home sales in Southern California are slowing down as cold demand of high interest rates and economic uncertainty.
Eric Sayer | Bloomberg | Getty Images
Sales of homes owned before June fell 2.7% in May, down from 3.93 million on a seasonally adjusted annual basis, according to the National Association of Realtors. Analysts were hoping for a drop of just 0.7%. Sales have not changed since June 2024.
The report is based on the closure, so if the average rate for a 30-year fixed mortgage exceeded 7% several times and not below 6.8%, the contract likely signed in April and May, according to Daily Daily.
“High mortgage fees are causing home sales to continue to get stuck at cyclical lows,” said Lawrence Yun, chief economist at NAR, in the release. “If the average mortgage rate drops to 6%, the scenario analysis suggests that 160,000 renters become first-time homeowners from existing homeowners, leading to rising sales activity.”
Mortgage rates have not moved significantly in the past few months, but remain stubbornly high amid concerns over the wider economy. Currently, the average rate is 6.77%.
Supply continues to rise, with 1.53 million units being sold at the end of June. This represents 4.7 months of supply at the current sales pace, up 15.9% from the previous year. The market is still lean as six months of supply is considered balanced between buyers and sellers.
The median price of homes sold in June was $435,300, up 2% year-on-year, a record high in June. This marks the 24th consecutive month of an annual increase.
“Multi-year supply is increasing record home prices. Home construction continues to slow population growth. This is preventing first-time home buyers from entering the market,” Yun said, noting that the average homeowner’s wealth has increased by $140,900 over the past five years.
Sales continue to be excellent in the high end of the market. Homes under $100,000 fell 5% per year. Homes priced between $100,000 and $250,000 rose 5%. Homes priced above $1 million jumped to 14%.
The home is spending more on the market on an average of 27 days compared to last June 22nd. High-end homes sell faster than prices below $500,000.
First-time buyers accounted for 30% of sales. Historically, its demographic accounts for 40% of all buyers. The share of all cash transactions remained rising at 29% of sales. Pre-Covid cash sales account for around 20% of the market.
The listed homes received an average of 2.4 offers, down slightly from 2.5 last month, down from 2.9 the previous year.
