T
he US economy's mixed signals are prolonging the housing market slowdown, despite low unemployment and falling mortgage rates. Key points include:

    * The US added 147,000 jobs in June, with April and May numbers revised upward.

    * Mortgage rates have fallen for five consecutive weeks, averaging 6.67% as of July 3.

    * Economists expect a lackluster summer for home sales due to high prices and rates.

    The strong labor market has reduced the likelihood of interest rate cuts in July and September, according to Sam Williamson, senior economist at First American. Federal Reserve Chair Jerome Powell stated that a resilient labor market would deter rate cuts.

    Mortgage rates continue to decline, but this hasn't sparked home sales. Purchase applications were nearly flat this week, indicating economic uncertainty is keeping buyers on the sidelines.

    The upcoming trade deal deadline and renewed tariff worries are concerns for the market. Elevated borrowing costs are limiting buyer activity, and homes are spending more time on the market, supporting the buildup of inventory and shifting leverage back to buyers.

    Summer seasonality will work against home sales in the short term, with inventory expected to climb and approach pre-pandemic levels nationally. Home price growth continues to slow, with Cotality estimating a 1.8% increase in May, the slowest year-over-year increase since 2012.