After a four-month slump, sales of previously occupied homes finally picked up in July. Lower mortgage rates and a rising number of homes on the market appear to have encouraged more home shoppers to make a move.
Despite the news, the increased supply of homes did not help cool home prices. Sales are still down 2.5% from this time last year. Although numbers came in slightly above expectations from economists, the market remains cautious.
Home prices have been steadily increasing for 13 consecutive months. The national median sales price climbed by 4% from last year, reaching over $400,000 in July.
The National Association of Realtors’ chief economist said while sales are still sluggish, consumers are seeing more options. Affordability is improved thanks to lower mortgage rates, and inventory is on the rise. There were 1.33 million unsold homes at the end of July.
The U.S. housing market has faced some serious challenges since mortgage rates began to climb in 2022. Last year, existing home sales plunged to their lowest level in nearly three decades, with mortgage rates hitting a 23-year high of 7.79%.
But there may be some relief on the horizon for prospective buyers. Mortgage rates have been easing recently, with the average 30-year home loan now sitting at around 6.5%. With inflation showing signs of cooling and signs of a softer job market, there’s speculation that the Federal Reserve may cut its benchmark interest rate for the first time in four years as early as next month.
