WASHINGTON (AP) — U.S. sales of existing homes fell 0.6 percent in June, the third straight monthly decline, as higher prices and a limited supply of listings have sidelined many would-be buyers.
The National Association of Realtors said Monday that homes sold last month at a seasonally adjusted annual pace of 5.38 million in May. Over the past year, home sales have tumbled 2.2 percent.
Many Americans searching for homes face prices that are climbing at roughly double the pace of wages. Sales of entry-level homes worth less than $250,000 have fallen amid a constrained inventory — and the decline accounts for nearly all of the annual drop in home sales. Still, the number of homes for sale in June rose on an annualized basis for the first time since the middle of 2015, a sign that the 3-year downward spiral in inventories may be ending.
Sam Khater, chief economist at mortgage buyer Freddie Mac, said the lack of meaningful pay raises could weigh on the housing market.
"This ongoing issue will likely lead to more affordability headwinds for those trying to buy a home in the months ahead," Khater said.
The number of homes on the market increased a scant 0.5 percent from a year ago to 1.95 million. But the slight improvement comes as prices have climbed beyond the reach of many Americans. The median sales price in June increased 5.2 percent from a year ago to $276,900.
Higher costs are most pronounced in the West, where the median sales price has jumped 10.2 percent over the past year to $417,400. Those increased prices have corresponded with a 5 percent drop in sales in the West during the same period. Home prices in the West have increased at roughly three times faster than other parts of the United States, reflecting the higher costs of land and booming local economies such as San Francisco, Denver and Seattle.
In June, sales fell in the West and South, but they rose in the Midwest and Northeast.
Sales of homes worth less than $250,000 have declined nationwide over the past year, a sign that many in the middle class and possible first-time buyers are getting priced out of the market. By contrast, sales of homes worth more than $1 million have surged 7.6 percent this year.