The US housing market looks a little better at the moment as existing home sales in July rose 2.5% after slipping 1.3% the month before. Sales of single family homes went up 2.8% against a 1.1% drop in June. Sales of condominiums were unchanged after declining 3.3% in June.
The median home price in July stood at $280,000, down from $285,000 in June but up from $269,000 in July 2018. Home inventory softened somewhat to 4.2 months from 4.4. Existing home sales rebounded 0.6% y/y, which is the first annual gain since 2002.
Housing should continue to be in good shape for the next several months as mortgage rates remain low and are expected to dip further. The 30-year rate stood at 3.9% in mid-August, down from 4.01% in the prior month. As Trump pushes for still lower rates, we may see 30-year rates ease off to around 3.5% by mid-September. The Fed in the release of its most recent FOMC minutes indicated that there will be further Fed funds rate cuts this year, including one in September.
Meanwhile, inflation is expected to remain subdued at around 2.2% and the trade conflict with China is anticipated to keep economic activity in check.