In June 2021, the United States saw attractive mortgage rates alongside continually looming inflation. As a matter of fact, annual inflation rose to its highest level in June since August 2008.
The latest data shows that inflation continues its epic climb while home sales rapidly recover across the country. However, there was little economic news this week.
Recent news reflects stunning growth that made mortgage rates soar in February 2021. Across the country, there continue to be positive signs related to the economy as several states drive reopening efforts.
The housing market data has been somewhat disappointing this year, and the most recent reports did little to reverse the trend. In July, both new and existing home sales decreased a little from June. For existing home sales, which make up roughly 90% of the market, this was the fifth straight month of declines, and they were lower than a year ago. The inventory of existing homes available for sale fell slightly from June to a 4.3-month supply. A 6-month supply is considered a healthy balance between buyers and sellers. Sales of new homes fell to the lowest level since October 2017. A number of factors have contributed to the loss of upward momentum in home sales this year. One big reason is a lack of inventory in many regions, especially for lower priced homes. Single-family home construction is essentially flat from a year ago, and it is not meeting the demand at the lower end of the market. Builders say that rising land, material, and labor costs are obstacles to a faster pace of construction and make adding entry-level homes less desirable due to lower profit margins. For decades, single-family housing starts averaged about 1.1 million per year. Following [...]