What's Happening?
Sales of previously owned U.S. homes rose by 2% in July, driven by a modest decline in mortgage rates and an increase in housing inventory. The National Association of Realtors reported a seasonally adjusted annual rate of 4.01 million units sold, surpassing economists' expectations. Despite the increase, the housing market remains in a slump, with affordability challenges persisting due to high home prices and mortgage rates.
Why It's Important?
The rise in home sales indicates a slight improvement in housing affordability, offering more options for buyers. Wage growth is now outpacing home price growth, providing some relief to prospective homeowners. However, first-time buyers continue to face challenges, as they accounted for only 28% of sales last month. The increase in inventory is a positive sign, potentially leading to more competitive pricing and better deals for buyers.
AD
What's Next?
The housing market may continue to see gradual improvements if mortgage rates remain stable or decrease further. The increase in inventory could lead to more competitive pricing, benefiting buyers. Sellers may need to adjust their strategies, offering incentives to attract buyers. The market dynamics will be closely watched, especially in regions with varying building restrictions.
