Existing home sales, 90% of the US housing market, will continue their recovery in July after the pandemic shutdown plunged May purchases to the lowest level in a decade. Returning employment and low financing costs support purchases. Markets and the dollar are unlikely to be moved by the July housing figures, Joseph Trevisani, an analyst FXStreet, reports.
Key quotes
“Previously occupied homes sales are expected to jump 14.7% to an annual rate of 5.38 million following June’s 4.72 million rate and two months after May’s 3.91 million pandemic bottom.”
“The decision to buy a home, for most Americans their largest and longest financial transaction, reflects more than anything else, their long-term view of the labor market. Low mortgage rates provide added incentive but they cannot replace employment and employment prospects as the deciding factor in assuming a 30-year mortgage.”
“If the July forecast at 5.38 million is accurate it would put the sales rate just 6% below its 13-year high of 5.72 million in February. With a 10.2% unemployment rate, 15 million people collecting unemployment insurance and millions of others receiving government assistance that is a rather astonishing figure.”
“Housing has never been a market or dollar moving statistic if for no other reason that its information is more than a month old. That is not going to change on Friday. But with the state of the US economic recovery much in doubt, a good sales number is an energetic vote in favor of stronger growth.”
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