How lower rates would affect new vs. existing home sales
Housing stocks are rising following Federal Reserve Chair Jerome Powell's dovish comments at the Jackson Hole Economic Symposium on Friday, which signaled interest rate cuts to come that could feed into mortgage rates. This comes alongside surprisingly strong new home sales data for the month of July. With the US housing market in need of relief, HousingWire lead analyst Logan Mohtashami joins Market Domination to discuss the potential impact of a rate cut on the housing market. Mohtashami distinguishes between two segments of the housing market: new homes from builders and existing homes sales. He explains that when rates fall, homebuilders can "sell homes like a commodity," while existing homes "do not have that ability." Existing homes are struggling to sell because the market hasn't seen mortgage rates under 6% for quite some time, Mohtashami explains. "I think the builders will always have a rate advantage until mortgage rates get well below 6% for the existing home market," Mohtashami tells Yahoo Finance. "If mortgage rates fell 2% and actually stayed lower below 6%, the existing home sales market could get some traction." For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Angel Smith
