Existing home sales in the US are hitting a 5-month high, a sign of an impending recession

REUTERS / Jessica Rinaldi

• Americans bought the oldest homes in five months in July, signaling a resurgence in the residential property market.
• The National Association of Realtors said that sales of existing homes reached an annual rate of 5.42 million in July, up 2.45% from a slight decline in June.
• The rise in sales was partially fueled by lower mortgage rates, indicating that the Federal Reserve's trend of lowering interest rates could strengthen the US economy.
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Americans still seem to have an appetite for real estate.

Existing home sales in the US hit a five-month high in July, defying any hint of an impending economic slowdown. They climbed to an annual rate of 5.42 million in July, up 2.45% from a June recession, according to the National Association of Realtors.

The rebound in the housing market is a positive sign for the US economy amid the many recessions that have appeared around the world in recent weeks.

The increase in sales is partly due to lower mortgage rates, suggesting that the Federal Reserve's move to lower interest rates could be beneficial for the economy. President Jerome Powell is scheduled to speak at the Jackson Hole Symposium later this week, and investors will closely follow any comments on future developments in borrowing costs.

"Lowering mortgage rates improves housing affordability and brings buyers to the market," said Lawrence Yun, chief economist of the association.

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While low rates bring new buyers to the market, there is also a dearth of low-priced homes that drive up prices, Yun added. There remained a total of 1.89 million units previously available for sale at the end of July, compared with 1.92 million in June.

The decrease in inventories brought the median selling price of all housing types to $ 280,000, up 4.3% from the same month last year. The month of July also marked the 89th consecutive month of price increases from one year to the next.

Daniel Silver, economist at JPMorgan, has echoed Yun's sentiment about the market's improvement.

"It seems that home sales have firmed up so far this year due to lower mortgage rates," Silver said in a note to customers Wednesday. "July was the second strongest month for existing home sales since April 2018."