Existing home sales dropped 2.4% in June as median prices hit an all-time high of $440,600 and mortgage rates stayed elevated — a combination that's locking working Americans out of homeownership and eroding the middle class's primary path to building wealth.

Economists polled by Reuters expected sales to rise to a 4.20 million annual rate. They came in at 4.09 million. The experts are always surprised because they don't live in the economy the rest of us do.

The National Association of Realtors' chief economist, Lawrence Yun, acknowledged that buyers are "sensitive to affordability conditions," but pointed to job gains — over half a million since the start of the year — as a source of support. Jobs matter, but paychecks stretched by years of inflation don't buy what they used to, and a paycheck that can't cover a mortgage doesn't build equity.

The damage is not distributed evenly. CNBC reported that sales of homes priced above $1 million surged 18% from a year ago, and homes between $750,000 and $1 million rose nearly 14%. Meanwhile, sales of homes priced below $100,000 fell 1.7%. The entry-level market — where first-time buyers and working families compete — is being hollowed out. First-time buyers made up just 33% of June sales, up slightly from 30% a year ago but well below the 40% share needed for a healthy market.

Mortgage rates remain roughly 45 basis points above where they sat before the Iran war sent them surging, according to Freddie Mac data cited by Reuters. That conflict-driven spike compounded what was already a Fed-fueled affordability crisis. Meanwhile, homeowners locked in at rates below 5% have no incentive to sell, strangling supply. Inventory fell 0.6% in June to 1.56 million units — a 4.6-month supply, well below the six months that signals a balanced market. The National Association of Home Builders puts the national housing shortfall at 1.2 million units, concentrated in entry-level homes.

Yun warned that without "consistent gains in inventory, home prices can accelerate" and called it "critical to introduce more supply."

Congress passed a bipartisan housing affordability bill that would restrict single-family homeownership by investment firms and speed up environmental reviews for construction. Reuters noted that President Trump has declined to sign it until a separate voting bill passes. Both parties claim to want affordability; neither has delivered it.

One-quarter of June sales were all-cash deals. The people who don't need a mortgage are still buying. Everyone else is priced out — and the people who get paid to forecast this stuff still can't see it coming.