WASHINGTON, July 9 U.S. existing home sales unexpectedly fell in June as tight inventory boosted house prices to a record high and the Middle East conflict kept mortgage rates elevated, pushing potential buyers to the sidelines.
The report from the National Association of Realtors on Thursday underscored the growing affordability hurdle faced by many young people pursuing the so-called American dream of homeownership
Still, economists expected the housing market to make a small contribution to economic growth in the second quarter for the first time in more than a year. The U.S. Congress recently passed a bipartisan housing affordability bill, which includes measures to restrict single-family homeownership by investment firms and waive or speed up environmental reviews for construction projects.
President Donald Trump has declined to sign the bill until a separate voting bill is passed. “Affordability challenges are most acute for lower-income households and first-time buyers,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics. “Homebuying is much more affordable for upper-income households, who are likely to be homeowners, than for younger, renter households.” Home sales dropped 2.4% last month to a seasonally adjusted annual rate of 4.09 million units. Economists polled by Reuters had forecast home resales would climb to a rate of 4.20 million units. Home sales have been bouncing around a 4 million unit pace for years now, with NAR chief economist Lawrence Yun noting a similar trend happened during the 2008 Great Recession.