Home sales aren't picking up despite lower rates
Data today showed US existing home sales falling 1.7% in June to a pace of 5.27 million. All year, the numbers have been a mild disappointment and that's a surprise given that the economy has performed well and -- more importantly -- that mortgage rates have fallen nearly a full point.
US 30-year fixed:
The drop has stoked gains in US home builders and other housing-related stocks but the main index that tracks home builders is still 23% below the early-2018 high.
What's been puzzling is why there hasn't been a bigger pickup. Len Kiefer the deputy chief economist at Freddie Mac shows just how disappointing it's been. Existing home sales are at the lowest levels year-to-date since 2014.
Another way of looking at the data shows the seasonality in sales and the heat-map shows that the usual mid-year pickup hasn't really materialized.
Two reasons that have been floated:
- Foreign buyers - especially Chinese -- going on strike
- Student loan debt keeping young people out of the market
