US Existing Home Sales fall for 6th continuous month in July

US Existing Home Sales fall for 6th continuous month in July

US Existing Home Sales fall for 6th continuous month in July

The sale of US existing homes dropped to the lowest level of two new years in July, further evidence that the Federal Reserve’s aggressive monetary policy tightening campaign is decreasing housing demand, even though the price level of the house remains high.

The National Realtors Association said on Thursday, that the existing home sales fell 5.9% to a seasonal annual level of 4.81 million units last month, the lowest level since May 2020 when sales reached their lowest point during COVID-19 lockdowns. Apart from the pandemic, sales have been the slowest since November 2015. It was the sixth monthly fall in sales.

Economists surveyed by Reuters had predicted sales decreasing at a rate of 4.89 million units. Sales in the four regions.

Home Resale, which contributes to most of the Sales of U.S. homes, plummeted by 20.2% every year.

The report occurred immediately after the data of this week that shows the beginnings of single-family housing, which represent the greatest proportion of housing construction, fell to a minimum of two years in July. The national index Association of Home Builders / Wells Fargo Housing Market fell below the break-even level of 50 in August for the first time since May 2020.

Fighting to bring inflation to the 2% target of the American central bank, the Fed has increased its rate by 225 basis points rate since March. The report of the political meeting from July 26 to 27 published on Wednesday showed that Fed officials recognized that higher loan costs had cooled the demand for housing and “provided that this slowdown in housing activities would continue “.

The mortgage rates move together with the yields of the US Treasury. The 30 -year fixed rate mortgage is around 5.22%, compared to 3.22% at the beginning of the year, according to data from the Freddie Mac mortgage financing agency.

The deceleration of the demand could help slow down the housing prices, although much would depend on the supply, which is still low. The median price of existing housing increased by 10.8% compared to the year before $ 403,800 in July. That was the smallest profit in two years, although prices generally withdraw in July after emerging in June.

There were 1,310 million houses previously owned on the market, unchanged compared to a year ago. At the rate of July sales, it would take 3.3 months to exhaust the current inventory of existing houses, against 2.6 months a year ago.

The supply of six to seven months is seen as a healthy balance between supply and demand. Property usually remains on the market for 14 days. The buyer first contributed 29% of sales. All-cash sales made up 24% of transactions.

US Existing Home Sales fall for 6th continuous month in July