U.S. existing-home sales get boost in July from lower mortgage rates
The numbers: Sales of previously-owned homes edged up 2.5% in July, as mortgage rates offset the affordability crunch caused by high home prices at the margins.
Sales surged 8.3% in the West and increased by a more modest 1.6% in the Midwest and 1.8% in the South. In the Northeast, transactions fell 2.9%, even though this was the only region that did not see home prices rise over the past year. Nevertheless, the decline in interest rates could expand affordability for prospective buyers at the margins given the historically high home prices across many markets nationwide. That could buoy home prices in expensive coastal markets, where some sellers have been forced to cut prices to stoke interest.
What they’re saying: “Although lower mortgage rates are stirring the housing pot, a lack of pent-up demand, economic uncertainty and lofty prices in some major cities are keeping the market on low simmer,” Michael Gregory, deputy chief economist at BMO Capital Markets, wrote in a research note.
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