High mortgage rates coupled with record-high prices are causing homebuyers to pull back.

Sales of previously owned homes in June dropped 2.4% from May to 4.09 million units on a seasonally adjusted, annualized basis, according to the National Association of Realtors. Housing analysts were predicting a slight gain month over month.

June sales were, however, 2.8% higher than the same month a year prior.

"The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions," said Lawrence Yun, the Realtors' chief economist, in a release. "However, job gains—more than half a million since the beginning of the year—will continue to provide support for the housing market."

This count represents closed sales, so contracts that were likely signed in May, when the average rate on the 30-year fixed mortgage was still moving higher. It began rising sharply at the start of March at the beginning of the Iran war.

Inventory at the end of June was 1.56 million units, down 0.6% from May but 1.3% higher than June 2025. At the current sales pace, that represents a 4.6-month supply. The market is considered balanced between buyer and seller at a six-month supply.

With the market still lean, prices continue to rise. The median price of an existing home sold in June was $440,600, an increase of 1.8% from the year before and the highest on record. June is usually the strongest month for both sales and prices.