US Home Sales Fall for 2nd Month

US existing home sales posted a second straight monthly decline in July, with elevated prices and mortgage rates weighing on the housing market. The decline in existing home sales is part of a broader economic slowdown in the United States.

The decline in home sales was driven by higher mortgage rates, which scared off potential buyers. As a result, US sales of existing homes fell to a three-month low in July.

The housing market slowdown is not the only sign of economic weakness in the US. Retail sales also dropped in July, falling 0.6% after an unrevised 0.2% gain in June. This decline was the first drop in nine months, and according to some sources, the first drop in 14 months. Lower oil prices and an Amazon Prime sales hangover were contributing factors to the decline in retail sales.

## Why it matters The decline in existing home sales and retail sales is a sign of a broader economic slowdown in the United States. This slowdown is also reflected in consumer sentiment, which fell about 8% in August, snapping two consecutive months of improvement. The decline in consumer sentiment was driven by worries about inflation linked to the Middle East conflict, which weighed on households. As a result, consumers' expectations for the future have become more pessimistic, with only 8% of consumers expecting their income growth to outpace inflation in the year ahead.

The economic slowdown in the US has significant implications for the housing market, retail sales, and consumer spending. As the economy continues to slow down, it is likely that existing home sales and retail sales will continue to decline, leading to a broader economic downturn. The decline in consumer sentiment and the rise in inflation expectations also suggest that the economic slowdown may be more pronounced than initially thought.

## What happens next As the US economy continues to slow down, it is likely that the housing market and retail sales will continue to decline. The Federal Reserve will likely take a closer look at the economic data and may consider cutting interest rates to stimulate the economy. However, the rise in inflation expectations and the decline in consumer sentiment suggest that the economy may be more vulnerable to external shocks, such as the Middle East conflict. As a result, the economic outlook for the US remains uncertain, and it is likely that the decline in existing home sales and retail sales will continue in the coming months.