U.S. existing home sales rose (XHB) more than expected in July, marking a modest rebound after four consecutive months of decline, according to data from the National Association of Realtors. Home sales (ITB) increased by 1.3% to a seasonally adjusted annual rate of 3.95 million units, surpassing economists’ forecasts of 3.93 million units. The uptick in sales is largely attributed to improved housing supply and declining mortgage rates, which have provided a glimmer of hope that the housing market may be stabilizing.
The median existing home price jumped by 4.2% year-over-year to $422,600, with price increases seen across all four U.S. regions. The slight easing of mortgage rates, which averaged 6.49% for a 30-year fixed-rate mortgage last week, has contributed to this improvement. Rates have dropped from a six-month high of 7.22% in early May, driven by expectations that the Federal Reserve will implement an interest rate cut in September. The rise in home sales was most pronounced in the Northeast, where sales climbed by 4.3%, while the South, West, and Midwest saw more modest gains or remained flat.
Market Overview:- U.S. existing home sales rose 1.3% in July, surpassing expectations.
- Median home prices increased by 4.2% year-over-year to $422,600.
- Improved supply and declining mortgage rates contributed to the rebound.
- Housing inventory rose 0.8% in July, up 19.8% from a year ago.
- Entry-level homes remain in short supply, with inventory at a 4.0-month supply.
- First-time buyers accounted for only 29% of sales, below the ideal 40% threshold.
- The housing market faces mixed signals, with affordability concerns persisting.
- Mortgage rate fluctuations and the Federal Reserve’s actions will be closely watched.
- Challenges such as rising insurance costs and limited new construction remain.
Housing inventory also showed signs of improvement, rising by 0.8% to 1.33 million units in July, a 19.8% increase from a year ago. This growth in supply has been partly fueled by a surge in insurance premiums, prompting some homeowners to list their properties.
Looking ahead, the U.S. housing market continues to face mixed signals. While the recent increase in home sales and improving inventory suggest some stabilization, challenges such as rising insurance costs, limited new construction, and affordability concerns persist.
