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Housing: Existing home sales fell in June as mortgage rates rise

Yahoo Finance Live’s Julie Hyman breaks down U.S. June existing home sales.

Video Transcript

- Some breaking news on the housing front.

JULIE HYMAN: Yeah, in the US, June existing home sales down by 5.4% to an annual pace of 5.12 million. And that figure, by the way, is worse than estimated. Economists were predicting a 1.1% drop. So we got a 5.4% drop.

So we've been talking recently about these housing numbers, what they reflect. The building permits numbers that we got earlier in the week looked a little bit better than estimated. But as we talked about, there might be different dynamics at work there in terms of what's causing building of houses.

This number, which is by far the biggest part of the housing market, right, is existing, not new home sales. So this likely reflects what we're seeing in terms of mortgage rates going up, so that affecting housing affordability. We're still waiting for more data to figure out what effect that's having on the dynamic of pricing, right, overall. Are we starting to see prices come down as mortgage rates go up? That is historically what tends to happen. But overall, it looks like demand here is falling.

- Yeah, some interesting comments, too, that I need to look a little more into, but by Ian Shepherdson, an economist over at Pantheon, calling for a meltdown in the housing market. Strong terms, but still, you're getting a taste, I think, with this existing home sales data on what will likely potentially continue to happen as rates continue to rise in this country.

- And you mentioned pricing. Median home prices rose 13.4% from last year, that figure now coming in at $416,000. And then inventory as well, we saw that rise to 1.26 million homes just from a month ago as well.

JULIE HYMAN: Yeah, I am curious, I want to look at that price number month-over-month, too, not just year-over-year, to see if we are getting a little bit of a slowing in that. So I got to dig into that data.