The numbers: Sales of previously owned homes slipped 1.7% in June, reflecting ongoing weakness in the U.S. housing market despite a sharp drop in mortgage rates.

Existing-home sales sold at a 5.27 million annual pace last month, down from 5.36 million in May, the National Association of Realtors said Tuesday. That’s how many homes would be sold in 2019 if sales took place at same rate over the entire year as they did in June.

Economists polled by MarketWatch had forecast a seasonally adjusted 5.33 million rate.

Even after a big drop in mortgage rates since last fall, sales of previously-owned homes are 2.2% lower than a year ago. A 30-year fixed-rate mortgage averaged 3.8% in June vs. almost 5% last November.

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What happened: The median selling price in June rose 4.3% to $285,700 from a year earlier. Prices have risen in every month for more than seven years, keeping lots of people from jumping in.

Sales increased 1.5% in the Northeast and 1.6% in the Midwest. They fell 3.4% in the South and 3.5% in the West.

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Big picture: New construction has tapered off from last year’s post-recession peak and sales of both new and previously owned homes have also flagged.

Rising prices have been one big roadblock. Other factors include a scarcity of skilled labor, the lack of inexpensive lots on which to build, and a shortage of existing homes for sale which keeps prices high.

Falling mortgage rates might help some, but the industry faces long-term problems that aren’t going away. Families are forming at a faster rate, but high prices and a dearth of available homes have stunted what should be notably stronger demand.

What they are saying: “Home sales are running at a pace similar to 2015 levels — even with exceptionally low mortgage rates, a record number of jobs and a record high net worth in the country,” said Lawrence Yun, NAR’s chief economist.

“The housing sector is struggling to break higher despite lower borrowing costs and steady income growth. Given the alternative — think of 2009 — steadyish growth isn’t that bad,” said senior economist Jennifer Lee of BMO Capital Markets.

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Market reaction: The Dow Jones Industrial Average DJIA, +1.33% and S&P 500 SPX, +1.59% rose in Tuesday trades. Stocks has soared to fresh records on solid corporate earnings and expectations that the Federal Reserve will cut interest rates soon.