US Housing Sector Continues To Heat Up

Mortgage applications in the USA moved higher for the third week in a row, rising 4.1% over the week ending July 17th. This follows a 5.1% rise over the previous seven days and is further indication of a potential nationwide housing market recovery.

Figures earlier this month showed the number of new residential construction projects were higher than expected over June, whilst new home sales spiked 16.6% in May. House prices also inched higher in key states, as fewer properties are being brought to market due to homeowners taking stock of their post-lockdown finances.

Analysts believe the strong rebound within the sector is being driven by historical lows on mortgage rates, combined with strong demand from millennials who are still house-hunting despite Covid-19 concerns.

Others remain cautious that pent-up demand from pre-lockdown will eventually dissipate, whilst rising unemployment combined with a second wave of infections could impact heavily on the housing markets long-term recovery.

USD weakened following the latest data as risk appetite continues to grow – further stoked by the recent €750bn EU rescue package, rising vaccine hopes and buoyant global stock markets.

Elsewhere, tensions between Washington and Beijing were heightened following the US ordering China to close its consulate in Houston in a bid to protect American intellectual property and sensitive information regarding its citizens. In response, China said it is now considering closing the US consulate in Wuhan.