U.S. Existing-Home Sales Picked Up in July
August 21 2019 - 10:30AM
Dow Jones News
By Harriet Torry and Likhitha Butchireddygari
WASHINGTON-Sales of previously owned U.S. homes picked up in
July, suggesting that lower mortgage rates are beginning to drive
sales after a weak spring selling season.
Existing-home sales rose 2.5% in July from the previous month to
a seasonally adjusted annual rate of 5.42 million, the National
Association of Realtors said Wednesday. Economists surveyed by The
Wall Street Journal expected sales rose 2.3% last month.
Compared with a year earlier, sales in July rose 0.6%, the first
increase after a streak of 16 consecutive months of year-over-year
declines.
Lawrence Yun, the trade group's chief economist, said July's
uptick was an "inevitable realization given incredibly low mortgage
rates," alongside strong job conditions.
June's sales were revised higher, to a 5.29 million annual rate
from an earlier estimate of 5.27 million. That capped a weak spring
selling season overall. The spring is crucial to the housing market
because roughly 40% of the year's sales take place in March through
June.
Still, the housing market's slight pickup last month is a
positive sign for the sector, which has struggled this year despite
some favorable conditions for potential buyers.
Mortgage rates have been dropping steadily in recent months. The
average interest rate on a 30-year fixed-rate mortgage in July was
3.77%, down from 4.46% six months earlier, according to Freddie
Mac.
A shortage of homes for sale in some areas means home prices
remain high. The median sale price for an existing home in July was
$280,800, up 4.3% from a year earlier. There was a 4.2-supply of
homes on the market at the end of July, based on the current sales
pace.
For the second half of the year, low inventory remains a
challenge for the market, Mr. Yun said.
"The job market still remains strong but there is increasing
economic uncertainty," he said, adding "people may be hesitant to
buy a home if they think we may be facing an economic
recession."
Purchases of previously owned homes account for the bulk of U.S.
home-buying. The Commerce Department last week reported that home
building fell in July for the third straight month. Housing starts,
a measure of new-home construction, fell 4% in July from the prior
month to a seasonally adjusted annual rate of 1.191 million.
News Corp., owner of The Wall Street Journal, also operates
Realtor.com under license from the National Association of
Realtors.
(END) Dow Jones Newswires
August 21, 2019 10:15 ET (14:15 GMT)
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