US Housing

Lower interest rates not enough to boost home sales

US Housing Market Update
Written by Capital Economics Economist

We expect home sales will end 2020 only slightly higher than they are today. Admittedly, the drop in mortgage interest rates seen over the past few weeks has given a boost to mortgage applications. And rates are set to fall further in 2019. But that won’t lead to a sustained rise in home sales. Lower house price expectations, tight inventory and a slowing economy will all act as a constraint on housing activity.