New York (CNN Business) Interest rates are dropping and American mortgages are cheaper than they've been in years. The US economy is strong. That's a recipe for a booming housing market — but it isn't booming at all.

In June, existing home sales decreased 1.7% from May and 2.2% from a year earlier. That's about on par with where home sales were in 2015. America's housing market has stagnated for four years.

Last week, the 30-year fixed-rate mortgage fell to its lowest level since November 2016, according to the Mortgage Bankers Association. The average rate on a loan below $484,350 now stands at 4.01%, while the same 30-year mortgage for a higher loan balance has a 3.96% interest rate.

Mortgage rates have fallen as the Federal Reserve cut interest rates for the first time since the financial crisis last month, and the 10-year Treasury yield fell to its lowest level in nearly three years this week. The central bank's rate cut will make adjustable-rate mortgages cheaper, while long-term loans — like the standard 30-year mortgage — track the 10-year Treasury yield, according to Lawrence Yun, chief economist at the National Association of Realtors.

On top of that, American paychecks are growing, consumer spending is robust and unemployment is near a 50-year low. American consumers are doing great.

Read More