By Harriet Torry and David Harrison 

WASHINGTON-Sales of previously owned U.S. homes declined in June, as high prices and low inventory weighed on would-be buyers despite tailwinds from lower interest rates and continued wage growth.

Existing-home sales fell 1.7% in June from the previous month to a seasonally adjusted annual rate of 5.27 million, the National Association of Realtors said Tuesday. Economists surveyed by The Wall Street Journal expected sales fell 0.6% last month.

Compared with a year earlier, sales in June declined 2.2%. Sales have been declining year-over-year for 16 consecutive months.

"It doesn't make economic sense" that sales are refusing to break out despite job creation, rising wages and lower mortgage rates, said Lawrence Yun, the trade group's chief economist. The U.S. is in the midst of a housing shortage, he said.

The spring is crucial to the housing market because roughly 40% of the year's sales take place in March through June.

Affordability appears to be crimping housing demand. The median sale price for an existing home in June was $285,700, an all-time high on a nominal basis and up 4.3% from a year earlier. June's increase marked 88 consecutive months of year-over-year price growth.

Mortgage rates have been dropping steadily in recent months, a positive trend for potential buyers. The average interest rate on a 30-year fixed-rate mortgage in June was 3.80%, down from 4.64% six months earlier, according to Freddie Mac.

Still, housing inventory remains relatively low. There was a 4.4-month supply of homes on the market at the end of June, based on the current sales pace.

Purchases of previously owned homes account for the bulk of U.S. home-buying. The Commerce Department releases June new-home sales data on Wednesday.

News Corp., owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.

(END) Dow Jones Newswires

July 23, 2019 10:15 ET (14:15 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.