A real estate agent, right, walks with potential homebuyers as they visit the property of a home for sale in Sparland, Illinois.
Daniel Acker | Bloomberg | Getty Images
The recent weakness in the real estate market could reverse thanks to sharply lower mortgage rates.
Consumers signed more contracts to buy inventory in June than expected. According to the National Association of Realtors, so-called Pending Home sales rose 2.8% compared to May. Sales increased 1
"Employment growth is going well, the stock market has reached an all-time high and house values are steadily rising," wrote Lawrence Yun, chief economist at NAR, in a press release. "Combined with incredibly low mortgage rates, it's not surprising that mortgage rates have plummeted in two consecutive months."
The average interest rate for the 30-year fixed-rate mortgage on May 1 was 4.29%  and ended June at 3.81%, according to the Mortgage News Daily. That improved the affordability, but apparently not enough. Real estate prices are high and continue to rise in most major markets. According to the latest S & P Case-Shiller property price indices, growth in seven major markets rose in May.
"If mortgage rates remain close to recent lows, prices could rise again due to improved affordability and the possibility of limited inventory," said Danielle Hale, chief economist at Realtor.com.
The number of houses for sale rose for the most part this year, but declined in June. Some predict that inventories will fall again this fall. This leads to more competition in the market.
"In less than a month, homes are being sold at an average rate for existing homes and in three months for newly built homes at a rapid pace," Yun said. "Homeowner real estate capital has doubled to nearly $ 16 trillion over the last six years, but the number of potential buyers exceeds the number of real estate available and we are seeing a significant increase in inventories, especially in priced properties." Ensuring wider access to home ownership. Regionally, the real estate sales index for real estate agents in the northeast rose month-on-month by 2.7% and was 0.9% higher than a year ago, while in the Midwest the index rose by 3.3% per month and annually 1.7% in the South, 1.3% per month in the South and 1.4% per year in the South, and 5.4% in the West and 2.5% in the previous year.