Overview: It was a relatively quiet week for mortgage markets. With no major surprises in the economic data or the European Central Bank (ECB) meeting, mortgage rates ended the week slightly higher.
In June, sales of existing homes, which make up about 85% of the market, fell 5% from May, more than the consensus forecast from economists. Inventory levels stand at just a 4.1-month supply nationally, well below the 6-month supply that is typical in a balanced market. However, the shortage of inventory has improved from a year ago, as current levels are 23% higher than last year at this time. The median existing-home price of $426,900 was up 4% from a year ago and a record high. It should be noted, though, that the median price reflects a recent surge in activity in more expensive homes relative to lower-priced homes.
The latest results were similar for the segment containing newly constructed homes. In June, new-home sales, which account for the remaining 15% of the market, unexpectedly dropped from May to the lowest level since November. The median new-home price of $417,300 was nearly unchanged from a year ago. While existing-home sales measure actual closings during the month, new-home sales are based on contracts signed, making them a leading indicator of future housing market activity.
Following its first rate cut since September 2019 at its last meeting, the ECB made no change in benchmark interest rates on Thursday, as expected. The statement released after the meeting continued to say that future monetary policy decisions will be based on incoming economic data. Investors anticipate that there will be two more 25 basis-point rate cuts by the ECB before the end of the year.
Existing-Home Sales (millions)
Week Ahead
July 25
Q2 gross domestic product (GDP)
July 26
Personal Income and Outlays
Personal Consumption Expenditures (PCE) Price Index
July 31
Federal Reserve meeting
August 2
Employment Report
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