U.S. existing home sales had recovered to a three-month high in May, driven by lower mortgages rates and ongoing labor market strength. Mortgages rates below 4 percent have created attractive purchasing conditions, yet the continuing mismatch between entry level demand and scarce entry level supply continues to play an outsized role in the lethargic pace of existing home sales in the first half of 2019.
Consumers continue to feel reasonably positive regarding their employment and income prospects, which should give support for home buying, noted Wells Fargo in a research report. Furthermore, mortgage rates are likely to stay attractive, with the 30-year fixed mortgage rate expected to stay below 4 percent in the second half of the year.
“As more markets see more negotiating power switch from sellers to buyers, we look for existing home sales growth to improve in the coming months”, added Wells Fargo.
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