Both existing and new home sales were better than expected and better than June’s numbers. The annual rate for existing home sales rose to 5.99 million from 5.86 million and for new home sales 708,000 from 701,000. The estimates were for them to be essentially flat month-over-month. Record low mortgage rates may be helping but the high price of homes is pushing potential buyers out of the market. Also, there is clearly a lengthening of homes on the market.
Housing is still strong, and the summer months have been very good for sellers, but August numbers are likely to be showing a hint of weakness and that should continue into the fall. As long as the FED keeps its foot on the easy money peddle mortgage rates will remain at or near record levels and that is very supportive of the housing market.
The FED will maintain its stance as long as inflation does not spike from its high current level and there is some slack in the labor market.