Existing Home Sales Still Stuck In June

Sales of previously owned homes fell in June from one month earlier, according to new numbers from the National Association of Realtors. Sales were down 2.7 percent from May and were flat from one year ago. Lawrence Yun, NAR’s chief economist, says elevated mortgage rates continue to be the primary factor influencing buyers. “High mortgage rates are causing home sales to remain stuck at cyclical lows,” Yun said. “If mortgage rates decrease in the second half of this year, expect home sales to increase across the country due to strong income growth, healthy inventory, and a record-high number of jobs.” In other words, conditions are otherwise favorable for home buyers but prices and rates have kept them in a holding pattern. Should mortgage rates fall, even modestly, home buyers will likely respond. Yun says a mortgage rate drop of less than a full basis point could help 160,000 additional renters become first-time home buyers, in addition to increasing sales activity from current homeowners.