Is Our Housing Market Cooling?

Fresh housing data is in the offing this week, and The Wall Street Journal is watching for warning signs.
Investors will be watching this week for further signs that the housing market is cooling. Data on existing- and new-home sales for July are on tap for Wednesday and Thursday. Existing-home sales slumped in June for the fifth time in the first six months of the year, while new-home sales fell that month to the weakest pace in eight months. Those are worrisome trends for investors who consider housing a crucial indicator of overall economic health.
Shares of home builders have tumbled this year on higher costs for labor and materials, particularly lumber, and as a rise in mortgage rates has discouraged some buyers. Lumber prices surged to an all-time high in May, driven by a trade dispute with Canada, wildfires and limited rail capacity, before pulling back this summer. Mortgage rates, meanwhile, have also hovered near multiyear highs, a shift from a period of ultracheap loans to a higher-rate environment that could squeeze first-time buyers.

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