Sales of previously occupied homes climbed 20.7% from May to June while mortgage applications rose 19% in the last week, rates near historic low. Joseph Trevisani, an analyst at FXStreet, outlines that markets are unaffected by the rise in home sales.
Key quotes
“Sales of existing homes, the largest category of the US market, soared 20.7% in June as buyers took advantage of some of the lowest mortgage rates on record with lockdown deferred purchases aiding the total.”
“Mortgage applications rose 4.1% in the July 17 week and were up 5.1% the prior week, according to the Mortgage Bankers Association. On the year they were 19% higher. This last statistic may indicate that the demand is more than just the backlog from the two month market closure.”
“The surge in June sales had little impact on the markets for a number of reasons. First, it was expected after the three-month near shutdown of sales and had been presaged by the May burst of purchases in the new home sector. Second, record low mortgage rates were sure to encourage buyers among the 90% of labor force who were still employed. Third, the June figures represent sales in late April and May that may not continue into June and after. Finally, the return of Covid cases in large parts of the country and the ensuing rollback of economic openings may put the brakes on the market again in June and July.”
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