The nation’s housing market has still not found the bottom of the slide it’s riding as home sales hit the lowest point since December 2023.

In addition, neither California nor the typically reliable Central Valley market was spared from the challenges of persistently high interest rates.

While nationally, the sales slump didn’t bring a drop in housing prices, cracks are beginning to show. For example, prices are dropping slightly in the Golden State.

The California Association of Realtors’ chief economist and senior vice president Jordan Levine predicted that home prices will fall in coming months.

“Home sales pulled back in June as interest rates remained volatile at the end of the second quarter. The average 30-year fixed rate mortgage began to decline since early July though and recently reached the lowest level in five months as the inflation cooling trend continued,” said Levine. “While it will take a couple of more reports for the Federal Reserve to begin cutting rates, housing affordability for qualified buyers should begin to see some improvement in the coming months.”

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Sales Slump Hitting Nearly All Central Valley Counties

Sales of previously occupied U.S. homes fell 5.4% last month from May to a seasonally adjusted annual rate of 3.89 million, the fourth consecutive month of declines, the National Association of Realtors said Tuesday.

Existing home sales were also down 5.4% compared with June of last year. The latest sales came in below the 3.99 million annual pace economists were expecting, according to FactSet.

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The U.S. housing market has been mired in a slump dating to 2022, when mortgage rates began to climb from pandemic-era lows. Existing home sales sank to a nearly 30-year low last year as the average rate on a 30-year mortgage surged to a 23-year high of 7.79%, according to mortgage buyer Freddie Mac.

In California, June sales in every region dropped both from the previous month and the previous year: a .8% drop from May and a 2.7% drop from June 2023.

However, county-level looks were more nuanced.

Fresno County was one of only three counties in the Central Valley to have anything positive to show. A 4.1% increase in sales from May came with a 5.8% drop from June 2023.

Sales drastically dropped in every surrounding county. Sales dropped more than a third in Kings County from the previous year and 30.4% from the previous month.

Tulare and Madera counties had double-digit losses across both categories. Merced showed positive numbers, growing both month-over-month and year-over-year.

One reason home sales have kept declining this year even as the inventory of properties on the market has increased is that many Americans may be holding out for mortgage rates to come down.

The average rate has mostly hovered around 7% this year — more than double what it was just three years ago —- as stronger-than-expected reports on the economy and inflation have forced the Federal Reserve to keep its short-term rate at the highest level in more than 20 years.

Sales Drop Didn’t Dent Prices, but Cracks Are Beginning to Show

Home prices rose even as sales slowed and the supply of properties on the market climbed to its highest level since May 2020.

“Right now we’re seeing increased inventory, but we’re not seeing increased sales yet,” said Lawrence Yun, the National Association of Realtor’s chief economist.

All told, there were about 1.32 million unsold homes at the end of last month, an increase of 3.1% from May and up 23% from June last year, NAR said.

Sellers are still benefiting from a tight housing market inventory, but there may be a shift coming.

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Homebuyers snapped up homes last month typically within just 22 days after the properties hit the market. And 29% of those properties sold for more than their original list price, which typically means sellers received offers from multiple home shoppers.

In California, home prices grew on an annual basis but dropped nearly a full percentage point from May.

The Central Valley tracked the statewide trend, climbing 4.8% from last year but dropping .8% from June 2023.

Driving home prices upward is California’s million-dollar home market.

Million-dollar home sales rose 2% while those below $500,000 dropped 21%. Million-dollar home sales make up more than a third of all sales, the biggest share in at least the last five years.

The Associated Press contributed to this story.