Existing Home Sales Growth is Set to Improve if Historical Relationship with Rates Holds

Existing home sales missed expectations in May, reflecting a lack of activity during coronavirus induced lockdowns. Even with the miss, there is good news for the housing market: 30-year mortgage rates are near historic lows. The chart above shows the close relationship between existing home sales and 30-year mortgage rates. Under normal circumstances as mortgage rates decline, existing home sales rise. This is a positive backdrop for the housing market in the months to come, particularly if mortgage rates trend lower. For those looking to buy, now may be a great time to lock-in low interest rates.