3 Funds To Benefit From Robust Home Sales

Per the latest report from the National Association of Realtors, existing-home sales in the month of July increased more than estimated. The metric was boosted by a robust labor market as well as low mortgage rates. Such developments indicate that the housing sector in America remains upbeat despite weakness in the global economy.

Meanwhile, the economic index, which measures business trends in the United States, also inched up in July. The Conference Board Leading Economic Index gained 0.5% from June to 112.2 in July.

Further, Ataman Ozyildirim, senior director of economic research at the Conference Board stated that improving housing permits, low levels of unemployment insurance claims and upbeat stocks prices have boosted the economic index. Under such broadly encouraging conditions, considering real estate mutual funds seems prudent.

Existing Home Sales Nudge Up

Federal Reserve’s move to lower interest rates has been supporting the U.S. economy. This is evident from the fact that the country’s housing sector exhibits strength at a time when the global economy reels under pressure from trade tensions and weak economic fundamentals.

The National Association of Realtors reported that the existing home sales rose 2.5% to a seasonally-adjusted annual rate of 5.42 million units in July. The consensus estimate for the period was 5.39 million units.

Meanwhile, June’s reading was also revised to a slightly higher 5.29 million units from 5.27 million units reported earlier. The metric measures sales and prices of existing single-family homes across the country. The reading includes condos as well as co-ops, in addition to single-family accommodations.

Existing home sales constitute about 90% of total home sales in the country. The reading for last month was also higher than the reading for the same period a year earlier — the then highest level in the past 17 months. It is largely expected that the Fed’s latest rate cut for the first time since 2008 will boost the housing sector in the days to come.

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