The failure of home sales to rebound in June after they had been depressed by unusually severe weather may have been an early sign that the recent economic slowdown is restraining housing demand. This view is supported by the absence of any meaningful rise in mortgage applications for home purchase even though 30-year mortgage rates have fallen to just 4.4%. If the economy has become an even larger drag on the housing market, then the recent easing in the rate at which house prices are falling may not be sustained.
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