On 9/7, the National Association of Realtors (NAR) released a report indicating that national home sales decreased by 2.4% in June compared to the previous month. The median price of existing homes also increased by 1.8% year-over-year, reaching a record 440,600 USD per unit. Most homes sold in June were priced between 250,000-500,000 USD. However, sales data is typically calculated after transactions are completed, suggesting that last month's sales likely reflect contracts signed in April and May.

The U.S. is currently facing a nationwide housing shortage. The National Association of Home Builders (NAHB) estimates this deficit to be around 1.2 million units. The number of existing homes listed for sale decreased by 0.6% last month, falling to 1.56 million units. This figure remains lower than the 1.8-1.9 million units available before the pandemic. Nevertheless, compared to the same period last year, the supply of homes increased by 1.3%.

A "Sold" sign placed outside a house in Washington in July 2022. Photo: Reuters

The NAR report highlights growing affordability barriers for many young Americans. The U.S. Congress recently passed a bill aimed at lowering housing prices. However, President Donald Trump has not yet signed it, awaiting the passage of another election-related bill.

"The affordability challenge is currently greatest for low-income households and first-time homebuyers. Purchasing real estate is much more accessible for high-income households – a group more likely to already own homes," stated Nancy Vanden Houten, chief economist at Oxford Economics.

Compared to the same period last year, home sales in June increased by 2.8%. Sales of homes priced above 500,000 USD saw a double-digit rise year-over-year. Meanwhile, sales of units under 100,000 USD declined by 1.7%.

Home loan interest rates have cooled after spiking due to the Middle East conflict. However, the average interest rate for a 30-year fixed-rate mortgage – the most common type – remains about 50 basis points (0.5%) higher than before the conflict, according to data from mortgage lender Freddie Mac.

High interest rates deter many from listing their homes for sale, exacerbating the supply shortage. Many homeowners are currently on fixed-rate mortgages below 5%. Furthermore, the Middle East conflict is intensifying inflationary pressures, giving the U.S. Federal Reserve (Fed) additional reasons to consider raising interest rates this year. The minutes from the Fed's 16-17/6 meeting, released this week, indicate policymakers are increasingly concerned about inflation. The Fed maintained its benchmark interest rate at 3.5-3.75% at its June meeting. However, new forecasts suggest a growing consensus for a rate adjustment this year.

Ha Thu (according to Reuters)