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US existing home sales rebound on lower interest rates

US existing home sales rebound on lower interest rates

Mubasher: Sales of previously owned houses rebounded in July, having fallen slightly in June, as lower mortgage rates made houses more affordable.

Total US existing home sales rose by 2.5% last July to a seasonally adjusted annual rate of 5.42 million units from the preceding month, the National Association of Realtors (NAR) said.

On an annualised basis, sales edged up by 0.6% last month, snapping the 16-month decline trend.

That said, the supply of affordable housing units is severely lower.

“The shortage of lower-priced homes have markedly pushed up home prices,” NAR’s chief economist Lawrence Yun said.

The median house price was $280,800, rising by 4.2% from the year before and marking the 89th month of yearly price increase in a row.

First-time buyers were responsible for 32% of sales in July, a decline from 35% in the prior month, while it was the same as the rate observed in the same month last year.

Total housing inventory shrank to 1.89 million at the end of last month, compared with 1.92 million in the prior month, and 1.92 million last year, the NAR said.

At July’s pace, it would take 4.2 months to sell the current inventory, compared with the ratio of 4.4 months in the prior month and 4.3 months a year ago.