A for-sale sign outside a house. Sales of existing homes jumped in June. There’s at least one bright spot amid all of the worrying signs in this economy: the housing market. Sales of existing homes jumped by almost 21% in June, according to the National Association of Realtors, and mortgage applications rose by 4% percent last week, according to the Mortgage Bankers Association.
It also appears that a strong housing market has a ripple effect on a hurting economy.
The homebuying process spins a lot of money out into the broader economy. Mark Vitner, senior economist at Wells Fargo, said sellers drive demand for realtor services and advertising. Buyers pay mortgage fees. Legal fees. Insurance premiums.
“And then of course when you buy the home, you’ve gotta move there, so you’ve gotta contract out with some movers, and …. you’re going to buy some new furniture and home furnishings,” he said.
And with mortgage rates near 3%, a lot of homeowners are refinancing their existing mortgages.
Adam Levitin at Georgetown University said that frees up money they can spend elsewhere.“That’s good for the economy, right? It means that they’re not just sinking money into their house, they’re now able to go and do home […]
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