Existing Home Sales See 1.3% Growth in July 2023

In a recent report, existing home sales in the U.S. experienced an increase of 1.3% in July 2023, resulting in a seasonally adjusted annual rate of 3.95 million. This growth aligns with expectations following disappointing data in June, which highlighted a slowdown in buyer activity. According to Skylar Olen, Chief Economist at Zillow, this uptick presents a sigh of relief in the housing market, indicating a gradual recovery from significantly low sales volumes and the impact of historically low new listings from existing homeowners. The phenomenon of interest rate lock-in, where owners hesitate to sell due to favorable mortgage rates, continues to suppress new home listings. However, the return of inventory in July has shown signs of lessening buy-sell competition, particularly benefiting buyers in the Southern states. As mortgage rates have also begun to decrease, potential buyers may find a better chance to re-enter the market if rates drop below 6%. Looking towards the latter half of the year, expectations can shift depending on Federal Reserve actions regarding interest rates. Ultimately, if rates continue to decline, it could reignite buyer interest and push the housing market toward a more robust fourth quarter. Thus, the market remains in a transitional phase, with numerous factors influencing buyer behavior and overall affordability.