Existing Home Sales: Lower Again As Inventories Rise

Bottom Line: Existing home sales fell slightly more than expected in July after 30-year fixed-rate mortgages surged above 7% again. Sales had been turning modestly higher amid solid underlying demand, despite lower affordability due to higher mortgage rates. But with only a month or two left in the summer selling season, some interesting trends have developed -- sales are falling again, yet inventories available for sale are creeping higher. Most existing homeowners with low mortgage rates are reluctant to move and pay off low-rate mortgages. But there appears to be a contingent of homeowners who need to sell, pushing up inventories. This bears close watching going forward as the housing market tries to find another new equilibrium after the latest surge in mortgage rates.