Existing home sales fell 2.4% last month from May to a seasonally adjusted annual rate of 4.09 million units, the National Association of Realtors said Thursday. Sales rose 2.8% compared with June last year.

The latest sales tally fell short of the roughly 4.21 million pace economists were expecting, according to FactSet.

Home sales have been mostly hovering close to a 4-million annual pace going back to 2023, far short of the historic norm that is closer to 5.2-million.

Sales have remained sluggish as mortgage rates have mostly trended higher in the months since the war between the U.S. and Iran started. Expectations of higher inflation amid surging oil prices have pushed up the long-term bond yields that lenders use as a guide to pricing home loans, causing mortgage rates to climb. Still, mortgage rates remain below where they were a year ago.

Despite the lackluster sales, home prices continued to rise nationally last month. The U.S. median sales price increased 1.8% in June from a year earlier to $440,600, an all-time high on data going back to 1999, NAR said. Home prices have risen on an annual basis for 36 months in a row.

First-time buyers accounted for 33% of home purchases last month, down from 35% in May and up from 30% in June last year. Historically, they made up 40% of home sales.

“Without a doubt, the affordability is a major challenge for people who want to become homeowners, which is the reason why we need more supply,” said Lawrence Yun, NAR’s chief economist.

The U.S. housing market has been in a slump since 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied U.S. homes were essentially flat last year, stuck at a 30-year low.

Through the first half of this year, seasonally adjusted sales of existing U.S. homes are up only 0.7% compared to the same period in 2025.

Years of soaring home prices, especially in the early part of this decade when rock-bottom mortgage rates fueled a buying frenzy, have left many would-be homebuyers frozen out of the market. And a chronic shortage of homes for sale nationally, due partly to years of below-average new home construction, has helped prop up home prices even in a multiyear sales slump.

Many of the homes purchased last month likely went under contract in April and May, when the average rate on a 30-year mortgage ranged from 6.23% to 6.53% — the highest level going back to late August, according to mortgage buyer Freddie Mac.

Those who can afford to buy at current mortgage rates or pay all cash are likely to encounter buyer-friendly trends in many markets. In June, median list prices fell 2.5% from a year earlier, the steepest annual drop on data going back to 2017, according to Realtor.com.

Still, housing market pricing trends vary widely regionally and locally. Consider, since peaking in 2022 at $449,000, list prices have come down 7.3% in the West and 3.5% in the South, but are up 10% in the Midwest and 12.6% in the Northeast, according to Realtor.com.

Meanwhile, home shoppers have more homes on the market to choose from than this time last year, although home inventory levels remain well below historical norms.

There were 1.56 million unsold homes at the end of last month, down 0.6% from May and up 1.3% from June last year, NAR said. That’s still well short of the roughly 2 million homes for sale that was typical before the COVID-19 pandemic.

June’s month-end inventory translates to a 4.6-month supply at the current sales pace. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.

“We need to see 30%-40% growth in inventory,” Yun said. “We’re not seeing that, so inventory (is) still remaining relatively tight.”