U.S. existing home sales fell by 2.7% month-over-month in June to a seasonally adjusted annual rate of 3.93 million, the lowest since September 2024. A low supply of homes, high prices, and high mortgage rates contributed to the drop.
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“If the average mortgage rates were to decline to six percent, our scenario analysis suggests an additional 160,000 renters becoming first-time homeowners and elevated sales activity from existing homeowners,” said National Association of Realtors chief economist Lawrence Yun. The 30-year fixed-rate mortgage (FRM) currently sits at 6.75%.
Trump Calls for Lower Rates to Boost Housing Market
After the home sales data was released, President Trump took to Truth Social to reiterate that a lower federal funds rate (FFR) could boost the housing industry.
“Housing in our Country is lagging because Jerome “Too Late” Powell refuses to lower Interest Rates. Families are being hurt because Interest Rates are too high, and even our Country is having to pay a higher Rate than it should be because of “Too Late,” said Trump, adding that interest rates should be 3% lower.
The FFR doesn’t directly affect the 30-year FRM, although it still provides indirect effects. A lower FFR reduces short-term borrowing costs, driving Treasury yields lower in the process. The 30-year FRM is pegged to 10-year Treasury yields. At the same time, the 30-year FRM considers other factors with more weight, such as inflation expectations and the economic outlook.
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