Lower mortgage rates helped boost activity
The US existing-home market picked up in July, with a drop in mortgage rates and greater choice for homebuyers helping spur an uptick after months of sluggish activity.
The National Association of Realtors (NAR) said sales of previously occupied homes across the country increased by 1.3% last month compared with June, although activity was down 2.5% on a year-over-year basis.
Sales for the month came in at a seasonally adjusted annual rate of 3.95 million, while home price appreciation showed no sign of slowing. The average sale price was 4.2% higher than July 2023, jumping to $422,600 and marking the 13th month in a row that prices have increased.
While the so-called mortgage “lock-in” effect has seen many homeowners decide to stay in place because of their current low mortgage rate, rather than list their property and face much higher borrowing costs with a new mortgage, that trend could be easing.
NAR’s chief economist Lawrence Yun told reporters after the release of the latest data that some homeowners appeared to be ready to leave those low-rate mortgages and move elsewhere – with inventory across the US having jumped by nearly 20%.
A slight jump in inventory, though, was not enough to significantly impact the overall supply shortage facing the US housing market. July’s 1.33 million available homes remained well below inventory levels from before the pandemic, when more than 1.9 million properties were listed across the country.
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