In the month of July, there was a decline of 2.2% in existing home sales.

The housing market is under pressure due to rising mortgage rates and limited inventory availability, leading to a decline in July's existing home sales.

Key Insights

• Existing Home Sales decreased by 2.2% in July, falling short of analyst estimates.
• The median price of existing homes sold increased by 1.9% compared to the same period last year.
• The rising mortgage rates are constraining buyer activity in the housing market.

On August 22, the National Association of Realtors released their Existing Home Sales report for July. The report revealed that Existing Home Sales experienced a decline of 2.2% compared to the previous month, which was below the analyst consensus of -0.5%.

Additionally, the report highlighted that the median price of existing homes sold increased by 1.9% from the same period last year, reaching $406,700. Meanwhile, the inventory of unsold existing homes grew by 3.7% from the prior month.

The National Association of Realtors noted that current sales activity is influenced by two key factors: inventory availability and mortgage rates. Unfortunately, both of these factors have been unfavorable to buyers.

According to Freddie Mac data, the 30-year fixed-rate mortgage rate has recently surpassed 7.00%, indicating that high interest rates will continue to impact housing market activity.

The FedWatch Tool suggests an 84.5% probability that the Federal Reserve will maintain the federal funds rate at its current level during the next meeting in September. However, Treasury yields are rising as bond trader’s express concerns that the Fed may decide to raise rates once more this year.

Following the release of the Existing Home Sales report, the U.S. Dollar Index remained near session highs, driven by a focus on the rising Treasury yields, which is considered bullish for the American currency.

Gold settled around the $1895 level as a stronger dollar and increasing Treasury yields exerted pressure on the precious metals market.

The S&P 500 experienced a rebound from session lows, with traders hoping that the disappointing housing data might lead to a more dovish stance from the Federal Reserve.