As we get ready to kickoff trading in the month of August, what is happening in the US housing market is wild.
July 31 (King World News) – Gerald Celente: The spring selling season, the year’s busiest for residential real estate, flopped this year as mortgage interest rates were stuck above 6.5 percent and the median home price set a record in June.
The number of existing homes sold in June fell 2.7 percent below May’s number to reach a nine-month low as the median selling price rose to $435,300, a record dating back at least to 1999 and a 2-percent rise from a year before, the National Association of Realtors (NAR) reported.
More than a quarter of the homes listed for sale on website Zillow cut their prices in June, the online broker said. The typical home sold last month was on the market for 27 days, compared to 22 in June 2024, according to the NAR.
Sales of newly built homes ticked up to 627,000 after ending May at 623,000. In a Wall Street Journal survey, economists had forecast sales of 645,000. Although the number rose month on month, sales fell 6.6 percent short of those in June 2024.
Home prices are falling in some markets where they skyrocketed in recent years, such as Florida and Texas. Still, homes for sale remain in short supply in much of the country, driving prices higher.
“The fact that we hit record-high home prices is reflecting multiple years of undersupply,” NAR chief economist Lawrence Yun said in a statement announcing the June figures.
The market is unlikely to improve unless mortgage interest rates fall more than slightly, The Wall Street Journal said.
TREND FORECAST:
Mortgage interest rates will remain elevated because they are linked to the yield on the U.S. treasury’s 10-year note. The treasury is expected to issue a new flurry of securities in coming months to fund the growing national debt.
As more government bonds and notes pour onto the market, their prices will fall, making them less attractive as investments. Therefore, the treasury will need to offer higher interest rates to entice investors to lend the government money.
Because the national debt will continue to rise, so will mortgage rates if left strictly to market forces. However, with Donald Trump as President, he will do all he can to bring both interest rates and mortgage rates down.
More lenders, government agencies, and home builders will offer more incentives and special programs to keep the residential real estate market from sinking further.
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