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Housing Recession In Sales But Not Prices

US DATA
  • Existing home sales again fell more than expected, this time -5.9% M/M in July (cons. -4.9%) after the -5.5% in June for the sixth consecutive monthly decline.
  • NAR Chief Econ: “the ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June” but "Home sales may soon stabilize since mortgage rates have fallen to near 5%”.
  • Improving supply and falling sales sees unsold inventory hit 3.3 months supply vs 2.6 in Jul’21 and 3.0 in Jul’20, putting downward pressure on median sale prices, which fell on the month from a peak June but are still up 10.8% Y/Y.
  • "We're witnessing a housing recession in terms of declining home sales and home building”. "However, it's not a recession in home prices. Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price."
  • Treasuries keep towards sessions highs, with 2YY -6.7bps and 10YY -5.5bps on the day for a small steepening.

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