”The second half of the year really depends on what happens with mortgage rates,” said Lawrence Yun, NAR’s chief economist.
The affordability constraints are limiting the activity of first-time buyers. They accounted for 30% of homes sales last month, unchanged from May. Historically, they made up 40% of home sales.
Home shoppers who can afford to buy at current mortgage rates or pay in cash are benefiting from more properties on the market.
There were 1.53 million unsold homes at the end of last month, down 0.6% from May, but up nearly 16% from June last year, NAR said. That’s still well below the roughly 2 million homes for sale that was typical before the pandemic, however.
June’s month-end inventory translates to a 4.7-month supply at the current sales pace, up from a 4.6-month pace at the end of May and 4 months in June last year. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.
Homes for sale are staying on the market longer as sales remain in the doldrums. Properties typically remained on the market for 27 days last month before selling, up from 22 days in June last year, NAR said.