Existing home sales fall in July as higher mortgage rates continue to bite
|Summary
Mortgage Rates Have Risen Sharply in Recent Weeks
The impact of the recent resurgence in mortgage rates is becoming increasingly apparent. Existing home sales declined 2.2% during July, the second straight monthly decline. Since existing home sales reflect contract closings, July's data largely reflect activity in June when mortgage rates averaged 6.8%. So far in August, the average 30-year mortgage rate has marched even higher, climbing back above 7%. The last time mortgage rates exceeded 7% was in 2022 when housing activity declined sharply. Conditions are slightly different now, with less intense home price appreciation and cooling inflation, all while employment and income growth remain sturdy. Nevertheless, higher mortgage rates stand to erode housing affordability and weigh heavily on housing activity in the near term.
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