US new home sales jumped by over 10% month-over-month in July, according to the US Census Bureau. The National Association of Realtors reported existing home sales to have risen by 1.3% month-over-month in July. National Association of Realtors (NAR) Chief Economist Lawrence Yun sits down with Brad Smith on Wealth! to talk about what this data is signaling about the US housing market, especially after Federal Reserve Chair Jerome Powell communicated plans to cut interest rates in September in his Jackson Hole speech. “Definitely, we are in a downward trend in mortgage rates. Housing sector [is] always one of the most sensitive to the mortgage rate changes, and consequently mortgage rate today at one-year-low level at under 6.5%, we have not seen this for the past 12 months,” Yun tells Yahoo Finance. “Very good news. Moreover, more inventory means more choices for consumers.” Yun believes falling mortgage rates — the 30-year fixed-rate mortgage now sitting at 6.46% — will open up new opportunities for homeowners, especially for those moving on into new life stages and wishing to sell. “So all [these] pent-up potential sellers, I think, will steadily move into the market as mortgage rates decline. Of course, it’s not a 3%, 4% mortgage rate, but it is a positive development for the real estate [market],” Yun explains.
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