Implications:  Existing home sales took a breather in June, giving up ground as median prices reached a new record high for the second consecutive month.  Sales of previously-owned homes fell 1.8% in June to a 5.52 million annual rate, but are still up 0.7% from a year ago.  Going forward, it is important to remember that home sales are volatile from month to month, but we expect the general upward trend of the past several years to keep going.  That being said, tight supply and rising prices remain headwinds.  Inventories have now fallen on a year-over-year basis for 25 consecutive months and are down 7.1% from a year ago.  Inventories are now the lowest for any June since at least the late 1990s.  This has also affected the months' supply of existing homes – how long it would take to sell the current inventory at the most recent sales pace – which was 4.3 months in June, down from 4.6 months a year ago.  According to the NAR, anything less than 5.0 months is considered tight supply, a benchmark which hasn't been exceeded since November 2015.  The good news is that demand for existing homes in June was so strong that 54% of listings were on the market for less than a month.  Higher demand and a shift in the "mix" of homes sold toward more expensive properties has also driven up median prices, which have now risen for 64 consecutive months on a year-over-year basis, and reached a new record high in June.  The strongest growth in sales over the past year is heavily skewed towards the most expensive homes, signaling that supply constraints may be disproportionately hitting the lower end of the market.  Tough regulations on land use raise the fixed costs of housing, tilting development toward higher-end homes.  The NAR suggests that strong demand could also be pushing some properties into higher brackets as multiple offers boost final sales prices.  Although some analysts may be concerned about the impact of higher mortgage rates, it's important to recognize that rates are still low by historical standards, incomes are growing, and the appetite for homeownership is eventually going to move higher again.   

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