US home sales dropped in June

America’s housing market unexpectedly lost momentum in June as rising home prices and expensive mortgages made it harder for buyers to close deals.

Existing home sales fell 2.4% from the previous month to an annual pace of 4.09 million homes, surprising economists who had expected sales to increase to 4.20 million units.

The slowdown affected most of the country, with sales declining in the Midwest, South, and West. Only the Northeast recorded growth. Even so, sales remained 2.8% higher than a year ago.

Home affordability continues to weigh heavily on the market. The median price of an existing home reached a record $440,600 in June, while many homeowners held back from selling because they are locked into much lower mortgage rates. That kept the supply of homes tight at 1.56 million properties.

First-time buyers accounted for 33% of all purchases, an improvement from last year but still below the level economists consider necessary for a strong and balanced housing market.