The U.S. existing home sales reached their lowest point since September 2024 when they reached 3.93 million units in June due to rising mortgage rates and economic uncertainty. The National Association of Realtors reported that sales decreased 2.7% to reach an annualized rate of 3.93 million units which matched the September 2024 record low.
The housing market slowdown creates substantial challenges for the entire economy. The housing sector contributes less than 5% to GDP but generates extensive economic effects through its related expenditures on appliances and furnishings and construction activities. The housing market shows multiple signs of weakness because single-family home construction has decreased and builders have reduced their plans for future development.
The housing market faces two major challenges because mortgage rates remain near 7% while economic concerns about the labor market continue to affect buyer sentiment.
The first half of 2025 ended with a negative note according to Ben Ayers who serves as a senior economist at Nationwide. The housing market will experience additional weakness during the fall months because renters plan to wait for better financing opportunities.
Home sales decreased throughout the Northeast and Midwest and South regions but experienced a minor increase in the West area. The upcoming new home sales report may show a small increase but it will not provide substantial assistance because interest rates remain high.
