Sales of previously occupied U.S. homes slowed in June, but a key measure of home prices climbed to an all-time high, adding to affordability challenges for prospective home buyers.

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 with the same period in 2025.