Married – House – Kids – No More

Posted on August 27, 2019 by grim

From HousingWire:

Harvard: First-time homebuyers are changing

The profile of first-time homebuyers in the U.S. is changing, according to researchers at the Joint Center for Housing Studies at Harvard University.

In a paper titled “The Shifting Profile of First-Time Homebuyers: 1997-2017,” researchers found that in the past 20 years, there has been a significant shift from married households to never-married households among first-time homebuyers. To examine trends in this group of homebuyers, researchers used the 1997-2017 American Housing Surveys. 

The 2017 AHS suggests that first-time homebuyers purchased approximately 1.8 million housing units in 2016, making up approximately 1.5% of U.S. households that year. 

“While discussions of first-time home buying often tie homeownership entry to life-stage changes like marriage and the birth of a first child, a growing share of first-time homebuyers do not fit this profile,” the paper stated. 

According to AHS, 35% of first-time homebuyers in 2017 had never been married, compared to 23% twenty years prior. Married homebuyers made up 61% of the first-time homebuyers in 1997 and declined to 46% in 2013. But, that percentage increased over the next three years, hitting 52% in 2017. 

“These trends suggest that there may be a fundamental shift in the way that young households are approaching first-time home purchases, such as an increased willingness to purchase homes individually or with unmarried partners,” the paper explained. 

“Because the trends in marital status are not mirrored by similarly-large shifts in the age distribution of first-time homebuyers, it is unlikely that they are driven by demographic shifts like decisions to delay marriage and childbirth until later ages,” the paper continued. 

Posted in Demographics, Economics, National Real Estate | 120 Comments

Insanity

Posted on August 25, 2019 by grim

From HousingWire:

Appraisals may soon not be required on certain home sales of $400,000 and under

Certain home sales of $400,000 and under may soon not need an appraisal, as federal regulators are close to approving a proposal to increase the threshold at which residential home sales require an appraisal for the first time since 1994.

In November, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve released a proposal that would increase the appraisal requirement from $250,000 to $400,000, meaning that certain home sales of $400,000 and below would no longer require an appraisal.

Now, the proposal is just one step away from being finalized and adopted as proposed.

Earlier this week, the FDIC published the final rule on the matter, stating that the rule is approved as proposed.

…

Now, it’s important to note that the new rules do not apply to loans wholly or partially insured or guaranteed by, or eligible for sale to, a government agency or government-sponsored agency.

That means that loans sold to or guaranteed by the Federal Housing Administration, Department of Housing and Urban Development, Department of Veterans Affairs, Fannie Mae, or Freddie Mac would still require an appraisal, per each agency’s rules.

But despite that fact, the change would have a sizable impact on the real estate market, as according to the OCC, the new rules would apply to approximately 40% of home sales.

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As one might expect, financial institutions, financial institution trade associations, and state banking regulators “generally supported” the proposal. Meanwhile, appraisers, appraiser trade organizations, individuals, and consumer advocate groups “generally opposed” the proposal.

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Other commenters noted that the rule could have an outsized impact on certain consumer groups, such as low-income individuals, members of certain minority groups, or first-time homebuyers, because those borrowers are more likely buy homes in the lower price range, and would therefore be more likely to buy a home without an appraisal.

Posted in Economics, Foreclosures, Housing Bubble, Mortgages, National Real Estate | 44 Comments

Look at the bright side America, you can afford to live in Detroit

Posted on August 21, 2019 by grim

From HousingWire:

These are the nation’s most affordable housing markets for middle-class families

The era of unusually affordable housing has ended, meaning America’s housing affordability has returned to average historical levels.

While this means homes are no longer cheap on a national basis, Redfin’s affordability report suggests the market is still relatively affordable for America’s middle-class families. 

According to Redfin’s data, in 68 of the 88 most populous American housing markets, a median-priced home is still affordable to families earning the area’s median household income. 

This is especially so for middle-class families living in Detroit, where it takes only $26,690 per year to purchase a home at the area’s median price point.

Detroit’s price point is less than half of the area’s $56,339 median income, making it the nation’s most affordable metro for middle-class families, according to Redfin.

Redfin Chief Economist Daryl Fairweather said people who live in places like Detroit, Pittsburgh and Cleveland tend to earn lower salaries than people in expensive coastal areas, but in many ways the Midwesterners’ quality of life is better.

“Even though they may make less money, it’s easier to purchase a home and build equity while providing for a family,” Fairweather said. “It’s no secret there’s an affordability crisis in high-priced places like the Bay Area, where modest homes can sell for well over $1 million. But in most of the country, homes are still affordable on the typical local inco

Posted in Demographics, Economics, Employment, National Real Estate | 147 Comments

Good Times in NJ?

Posted on August 19, 2019 by grim

From the APP:

What recession worries? NJ jobless rate at record low, employers scrounge

New Jersey’s job market was flat in July, but even if employers were in hiring mode, they’d have a tough time finding workers to fill the jobs.

That’s because the state’s unemployment rate dipped to 3.3% in July from 3.5% in June, the state’s Department of Labor and Workforce Development reported last week, setting a new record low. 

“We’re in the recreational business, and the economy is strong,” said Kevin Carlin, a spokesman for Micro-Air Inc., an Allentown-based company that makes electronic circuit boards and is trying to hire two employees.

The monthly unemployment report last week was mixed. It showed New Jersey lost 500 jobs with losses in leisure and hospitality and gains in fields like professional services and manufacturing.

…

New Jersey has been trying to climb out of an economic hole for the better part of two decades, making the transition to the digital age while navigating obstacles from the end of Atlantic City’s monopoly on gambling to the devastation of superstorm Sandy.

…

Recent economic data offers both glimmers of hope and echoes of the same old story.

Good news? Wages and salaries in the metropolitan New York area, which includes northern New Jersey, rose 3.9% during the past year, faster than the U.S. average and the strongest performance since the Bureau of Labor Statistics started tracking it in 2006.

Bad news? The state’s personal income, which includes not just wages and salaries, but also government benefits such as Social Security, has grown 1.1 percent during the past year, ranking 42nd nationwide, an analysis by Pew Charitable Trusts found. 

The jobs report for New Jersey offered little clarity. Over the year, the state has added 48,300 jobs for a growth rate that ranks 26th nationwide, according to an analysis of data from the U.S. Bureau of Labor Statistics.

“That suggests that … job growth would be higher if there were more people to fill open slots,” Rutgers University economist James W. Hughes said.

Posted in Economics, Employment, New Jersey Real Estate | 107 Comments

Will Murphy own this?

Posted on August 16, 2019 by grim

From InsiderNJ:

GSI Analysis: NJ’s Workforce and Revenue Results Are True Indicators of the State of Our Economy

“While a declining unemployment rate is good news, our workforce remaining below 2008 levels is one sign there’s more than meets the eye when it comes to New Jersey’s economy,” said GSI’s president Regina M. Egea. “Our weak GDP rate shows an economy that’s stagnant while others are booming and we have looming questions regarding our revenue sources in the event of an economic slowdown.”

A leading indicator of the lagging state of New Jersey’s economy was the July release of Q1 2019 Gross Domestic Product data from the U.S. Bureau of Economic Analysis. While the national economy reported a strong 3.1% rate, New Jersey reported a rate of 1.8%, trailing far behind other states in the region; including Delaware (3.9%), New York (3.8%),and  Pennsylvania (2.9%).

The civilian labor force remains 60 thousand below the 2008 average workforce size of 4,504,400 (vs. today’s 4,445,800.)  Employment increased by 11,000 and unemployment declining by 9,400, as the workforce size increased by 2,400.

Job losses were recorded in five out of nine major private industry sectors. The Leisure and Hospitality sector led sectors with losses, declining by 2,200 jobs during the month. The Trade, Transportation, and Utilities sector led gains with 1,600 new positions. An ongoing cause for concern remains the Financial Activities sector which lost 200 jobs for a total of 5,800 year to date. New Jersey has led the nation in job losses in that sector year over year.

…

Yesterday’s release of the monthly Treasury revenue report also illustrated some warning signs ahead for New Jersey’s economy and taxpayers.

The report noted strong overall revenues, including the Corporate Business Tax (CBT) totaling $177.8 million for the month of July, up $43.8 million, or 32.6% percent, over last July. Of concern, the Treasurer noted that the state is now “more than halfway through the second year of a temporary, two-year 2.5% surtax in the CBT on income above $1 million. Beginning in January, the temporary surtax will decrease to 1.5% for two more years before phasing out.” The surcharge made New Jersey’s corporate tax the second highest in the nation and to-date neither Governor Murphy nor legislative leaders have articulated a plan to replace the revenue in future years leaving the state exposed in the event of an economic slowdown.

Also of concern is a 2.2% decline year over year, or approximately $11 million, in the collection of the tax on gasoline. In August 2018, the Treasurer announced that due to a 4.4%, or $22 million, year over year decline in gas tax revenues, the state would be increasing the tax on motor fuels by 4.3 cents per gallon. The Treasurer has yet to announce whether this year’s decline will result in another increase.

Posted in Economics, Employment, New Jersey Real Estate, Politics | 42 Comments

Don’t Fear The Reaper (or maybe you should)

Posted on August 15, 2019 by grim

From CNBC:

More signs point to a softer housing market, even as mortgage rates fall

Homebuilders and buyers alike are pulling back, even as mortgage rates fall to multiyear lows. The housing market is simply too pricey, and consumers are starting to worry about the economy and their personal finances.

Just 12% of adults said they plan to buy a home in the next year, according to a survey done in the second quarter of this year by the National Association of Home Builders. That is down from 14% in 2018.

“The drop marks the third consecutive year-over-year decline in the share of adults thinking about buying a home, providing further evidence of a slowdown in the housing market, as potential buyers are held back by the lowest levels of affordability in a decade,” wrote Rose Quint, NAHB’s assistant vice president for survey research.

The price squeeze is showing up also in who is planning to buy. Among prospective homebuyers, 58% were first-timers this year, compared with 63% last year. First-time buyers usually have less wiggle room in their wallets, and home prices are rising fastest on the lower end of the market.

Homebuilders are also not helping. The supply of newly built homes for sale fell 1% in the second quarter, the first annual drop in six years, according to Redfin, a real estate brokerage. Prices for newly built homes have moderated, after 7 straight years of increases, but sales are up less than 1% annually.

…

Lower mortgage rates could help on the margins, but the reason behind those lower rates, namely growing fear of a recession in the U.S. economy, outweighs the benefit on a consumer’s balance sheet. Buying a home is an incredibly emotional experience, and potential buyers will often pull back when they have the slightest fear of losing their jobs or losing any income.

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 39 Comments

Snap back to reality

Posted on August 14, 2019 by grim

From Mortgage Professional America:

Homeowners are getting really good at valuing their homes

The gap between the value homeowners put on their refinance mortgage applications and the value assessed by professional appraisers has narrowed for the third straight month.

The gap was 0.63% in July according to the Quicken Loans’ National Home Price Perceptions Index (HPPI). The analysis of 27 metros found that the gap between the two valuations was less than 1% in 20 metros, and only 2 saw a gap of larger than 1.5%.

“As expected, with mortgage rates at three-year lows and the refinance share of mortgage activity continuing to hover above 50%, homeowners are increasingly aware of the true value of their home, said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “Prices continue to increase in most areas but the rapid growth of years past has moderated giving homeowners a better sense of their home’s market value.”

Posted in Economics, Mortgages, National Real Estate | 38 Comments

School rules

Posted on August 13, 2019 by grim

From HousingWire:

Half of homebuyers with kids base purchase on school district

Purchasing a home is one of the biggest decisions a person can make during their lifetime. After all, where you live determines many factors about your life, including where you work, worship or even send your children to school.

As back to school season approaches, a recent report from the National Association of Realtors highlights the different purchasing and selling habits of Americans, revealing that a significant share root their home purchasing decisions in school district quality.

…

“Parents inherently make sacrifices for their children and family, and that is no different when shopping for a home,” NAR chief economist Lawrence Yun said. “Of course, affordability is a part of the decision, but we have seen buyers with kids willing to spend a little more in order to land a home in a better school zone or district.” 

According to the company, the starkest difference between homebuyers that have children under the age of 18 and those who do not, is the influence of the neighborhood.

“The report found that those homebuyers who still have children living in their homes were likely to be drawn to specific neighborhood characteristics,” NAR writes. “For example, 53% of buyers with children considered a neighborhood based on the quality of the school districts within that neighborhood. 50% of buyers with children selected a neighborhood based on its convenience to schools.”

This deeply contrasts the purchasing influences of homebuyers without children as NAR determined that only 10% of childless homebuyers chose a neighborhood based on the quality of its school district. When it came to convenience of schools, only 6% of those buyers claimed it factored into their home buying decision.

…

However, the two groups deeply differed on their home selling urgency, as the report indicates that homebuyers with children are more likely to sell and purchase at a faster pace.

“When buying or selling a home, exercising patience is beneficial, but in some cases – such as facing an upcoming school year or the outgrowing of a home – sellers find themselves rushed and forced to accept a less than ideal offer,” Yun said.

According to the report, 23% of sellers with children reported that they sold their home “very urgently.” However, only 14% of buyers with no children said they had to sell their home quickly.

“One notable difference between the two groups is that 46% of those with children in the home said they had to sell somewhat urgently, while just under half of those with no children in the household said they were able to wait for the right offer,” NAR writes.

Posted in Demographics, Economics, National Real Estate | 50 Comments

Lowball! Creepy Stalker Edition

Posted on August 9, 2019 by grim

From the Star Ledger:

The Westfield ‘Watcher’ house finally sells — at a $400K loss

Five years after purchasing their Westfield home and receiving threatening letters from a mysterious “Watcher,” Derek and Maria Broaddus have finally sold it — but for much less than they bought it for.

The couple claimed the previous owners failed to disclose the existence of the “Watcher,” a letter-writer who said he was carrying on a family tradition of stalking the house and its occupants.

The Broadduses never moved into the property because they were spooked by four threatening letters from the “Watcher,” including the first letter received just three days after buying the home.

But now another couple has taken the infamous property off their hands.

The deed filed with the Union County Clerk’s office on July 1 shows the Broadduses sold the home for $959,360 to Andrew and Allison Carr. The Broadduses bought the home for $1,355,657, and it was originally listed for $1.25 million in March 2016.

One of the brave new homeowners, Andrew Carr, declined to comment on the purchase when reached by phone. The Broadduses did not immediately respond to calls seeking comment.

…

In December, the entertainment blog Deadline reported that Netflix won the rights to adapt a widely read story on the case, published this fall on New York Magazine’s The Cut.

“I’m happy for them they sold it,” said Lee Levitt, the Broaddus’s lawyer who represented them in suing the former owners. “I hope this nightmare is behind them, and I look forward to the Netflix version.”

Posted in Humor, Lowball, New Jersey Real Estate | 43 Comments

We are so f&cked

Posted on August 8, 2019 by grim

From NJ Spotlight:

AS MURPHY TAKES BOW FOR RECORD LOW UNEMPLOYMENT, CRITICS FEAR FUTURE SHOCK

How much have Gov. Phil Murphy’s policies to do with the state’s unemployment rate, which recently dropped to the lowest level on record? A whole lot — according to the governor. Critics of the governor’s economic policies have a different take.

Murphy — a Democrat who enacted several tax hikes last year and has been pushing lawmakers for more ever since — took a victory lap following the release of the state’s latest jobs report, bragging that his economic policies were “clearly … paying real dividends.”

“Today, we can say, confidently, that New Jersey is moving in the right direction,” he said during a recent public event in New Brunswick the day the jobs numbers were made public. “It inspires me to continue working hard.”

New Jersey wasn’t the only state to set a record for low unemployment. Alabama, Arkansas and Texas — all states with Republican governors — also scored their respective historic lows in June, according to figures compiled by the federal Bureau of Labor Statistics. 

Moreover, the broader trend for New Jersey’s unemployment rate also largely mirrors what’s been happening at the national level during President Donald Trump’s tenure, and even when President Barack Obama was in office. Trump, a Republican, has — like Murphy — not been shy about taking credit for the economic hot streak, which he’s linked to federal tax cuts and regulatory reforms.

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“Clearly, our efforts to grow the economy the right way are paying real dividends,” Murphy said during the event in New Brunswick.

During the same event, state Commissioner of Labor and Workforce Development Robert Asaro-Angelo highlighted the Murphy administration’s efforts to boost registered apprenticeship programs as an example of the governor’s approach to growing the economy. The total number of such apprenticeship programs has expanded by more than 30 percent since Murphy took office, Asaro-Angelo said. 

“These investments across the state by employers concerned with not just their bottom line, but with the health and security of their workers, their families and their communities, are going a long way to make us a fairer and stronger New Jersey,” he said.

Posted in Economics, Employment, New Jersey Real Estate, Politics | 42 Comments

No impact?

Posted on August 5, 2019 by grim

From NJ1015:

NO MELTDOWN: NJ HOME VALUES RISE, DESPITE FEARS OF TAX LAW

When federal tax law was changed a year and a half ago, alarms were rung by the real-estate industry warning it would be a gut punch to home values in high-tax, high-price states – especially New Jersey.

That hasn’t been the case, at least not yet.

The median sales price for a home in New Jersey is nearly 5% higher than one year ago, at $319,000, according to New Jersey Realtors. That’s in line with the year-over-year change nationally and in the Northeast.

Since the changes to the federal tax law were enacted in December 2017, the year-over-year change in the median sales price of all properties sold in New Jersey has ranged monthly from 2.5% to 7.4%, with the current 4.8% right in the middle.

That’s not to say the tax law has had no impact, as the number of sales are down nationally and in particular in New Jersey. The inventory of homes for sale in the state is also 10% less than a year ago. But the impact doesn’t seem to have been more acute in New Jersey.

“We haven’t seen the results of it yet. I think next year will be an interesting time to tell,” said Ilene Horowitz, president of New Jersey Realtors. “I think we’re going to see more next year how it has affected us.”

Horowitz said that now that people have filed their taxes once under the new law, they have a better understanding of the impact and that it could affect their home-buying plans. But she also said “the summer was even busier than the actual spring” in terms of buyer interest.

Moody’s Investors Service had said the effect would peak in 2019, then fade. It said 15 of the 30 counties where home values would be hit hardest are in New Jersey. Values weren’t expected to fall, necessarily, just be lower than they would have been otherwise.

The tax law was expected to affect housing prices in three ways: by capping at $10,000 the amount in state and local taxes that people could deduct from their taxable income; doubling the standard deduction, which reduces the need for mortgage interest deductions; and lowering the size of a mortgage, from $1 million to $750,000, on which a person can claim an interest deduction.

“When we talk to our buyers, it does come up in conversation, with the cap that we have now to write-offs for properties where the tax is over $10,000,” Horowitz said. “I think buyers are looking into it with caution with the higher taxes, but we haven’t seen a big effect yet.”

While home values haven’t fallen, the decline in home sales can be seen in the state budget.

Revenues from the state’s realty transfer fee, paid by home sellers, has increased for seven straight years, by an average of nearly 12% annually. However, the increase from the certified 2018 total to the revised 2019 projection was just 1.6%, and the increase for fiscal 2020 is forecast at 0.3%.

Posted in Economics, New Jersey Real Estate, Politics, Property Taxes | 248 Comments

Hope you’ve got a good house number

Posted on August 2, 2019 by grim

From HousingWire:

Why Some Home Prices Simply Don’t Make Sense

Psychologists often point out that people are torn between two minds, the rational and the instinctual. This makes the job of an economist a difficult one — market behavior would be easier to explain if everyone were a bit more reasoned in their judgments and actions. 

For a case in point, consider the following study conducted by a team of psychologists at Cornell University. Participants were asked to estimate how much they would be willing to spend at a hypothetical restaurant, either called “Studio 17” or “Studio 97.” The researchers found that participants were willing to pay significantly more ($32.84 vs. $24.58, on average) at a restaurant named Studio 97. In other words, the higher number in the restaurant name prompted people to think of larger dollar amounts when contemplating their willingness to spend.

New research shows that this phenomenon — known as an “anchoring bias” — can even influence property appraisals. Scientists at Yildiz Technical University in Turkey examined historical property data from Istanbul’s first cadastral survey, conducted in 1875. What started as an effort to understand the key determinants of home values quickly turned into a quest to explain peculiarities in nineteenth century Turkish home appraisals.

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This allowed the researchers to predict property appraisals from the matrix of data collected by the civil servants over 140 years ago. Using 315 real estate sites from three different neighborhoods in Istanbul, the researchers tested which variables (e.g., number of rooms, construction material, location, etc.) were most important in predicting property appraisals.

They found that all of the usual suspects (location, number of rooms, size, etc.) were influential drivers of property values. Curiously, however, they found that the home number was also predictive of property appraisals. According to their estimates, a two-fold increase in house number (e.g., 50 vs. 100) increased the appraised value by 10–25%.

The researchers searched for logical explanations. One theory, for instance, was that higher property numbers were associated with homes built in more valuable areas of the city. Upon further inspection, however, the researchers found no evidence in support of this association. They write, “Had real properties with high door numbers been located in the valuable parts of the city, or built earlier, those buildings would be distant from buildings with low door numbers. However, the street maps […] show no such pattern.”

Posted in Economics, Humor | 63 Comments

May Case Chiller

Posted on August 1, 2019 by grim

From Marketwatch:

Home prices continue to slow in May, Case-Shiller says

The numbers: Home price inflation slowed further in May as the S&P CoreLogic Case-Shiller 20-city index rose 0.1% in May compared with April on a seasonally adjusted basis. On an annual basis, prices were 2.4% higher, down from a 2.5% annual rate in prior month.

That is the 14th straight month in which the annual rise in home prices has slowed and is the slowest growth rate since August 2012.

What happened: Home prices continue to rise but at a much slower pace. The 12-month change is down from 6.7% in March 2018. Seattle is now the first city “in a number of years” where prices are lower on a year-on-year basis. Las Vegas and Phoenix remain quite strong.

Big picture: Home price rises have been slowing since the beginning of 2018 and lower mortgage rates haven’t stopped the trend. Economists think that further easing of home price appreciation is needed to boost sales. Pending home sales rose 1.6% over the past 12 months, the first gain in 17 months, a trade group said Tuesday. 

What are they saying? “We expect housing to plateau in 2019, rather than deteriorate further. This reflects our view that home affordability should improve because of gradually rising wages and the continued pickup in employment, both of which support household incomes at a time when home prices are increasing at a more subdued rate,” said Blerina Uruci, economist at Barclays.

Posted in Demographics, Economics, Employment, National Real Estate | 60 Comments

Sorry, no homes for you

Posted on July 29, 2019 by grim

From HousingWire:

Millennials want to buy homes, but their wallets are saying no

As summertime heats up, it’s safe to say that spring has officially come to an end. But while its cooler days may be behind us, data says its uptick in home buying interest is here to stay.

According to a survey from Realtor.com, this spring was filled with home-buying interest, especially from the nation’s first-time buyers.

This group of homebuyers, who often tend to be Millennials, made up 42% of spring’s home-shoppers.

“Based on our user responses, just under half of all home shoppers this spring were searching for their first home, and many of them were aging Millennials likely driven by life events such as moving in with a partner, getting married or starting a family,” Realtor.com writes. “It may come as a surprise to some people that Millennials are looking to small towns or suburbs, but when it comes to buying a home, Millennials aren’t that different than other generations.”

And they really aren’t that different, as the company noted the vast majority of these young shoppers indicated housing affordability was their top concern when purchasing a new home.

In fact, 42% of first-time buyers said they haven’t closed on a home yet because they can’t find a good house within their budget range, according to the survey.

This isn’t really surprising as several reports have indicated that a lack of affordability has kept many first-time buyers from entering the market.

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According to their findings, first-time homebuyers can afford only 20% of housing stock in some of the nation’s housing markets.

The survey confirms that the lack of entry-level supply is putting affordability pressures on too many buyers – especially those at the lower end of the market, where demand is the strongest,” NAR Chief Economist Lawrence Yun said. “This is why first-time buyers continue to struggle finding affordable properties to buy and are making up less than a third of home sales so far this year.”

Posted in Demographics, Economics, Employment, National Real Estate | 83 Comments

Ugly June

Posted on July 25, 2019 by grim

From CNBC:

US existing home sales fell 1.7% in June, vs 0.2% drop expected

U.S. home sales fell more than expected in June as a persistent shortage of properties pushed prices to a record high, suggesting the housing market was struggling to regain its footing since hitting a soft patch last year.

The National Association of Realtors said on Tuesday existing home sales dropped 1.7% to a seasonally adjusted annual rate of 5.27 million units last month. May’s sales pace was revised higher to 5.36 million units from the previously reported 5.34 million units.

Economists polled by Reuters had forecast existing home sales slipping 0.2% to a rate of 5.33 million units in June. Existing home sales, which make up about 90 percent of U.S. home sales, decreased 2.2% from a year ago. That was the 16th straight year-on-year decline in home sales.

The weakness in housing comes despite cheaper mortgage rates and the lowest unemployment rate in nearly 50 years.

Supply has continued to lag, especially in the lower-price segment of the housing market because of land and labor shortages, as well as expensive building materials. The government reported last week that permits for future home construction dropped to a two-year low in June.

The 30-year fixed mortgage rate has dropped to an average of 3.81% from a more than seven-year peak of 4.94% in November, according to data from mortgage finance agency Freddie Mac. Further declines are likely as the Federal Reserve is expected to cut interest rates next week for the first time in a decade.

Last month, existing home sales rose in the Northeast and Midwest. They tumbled in the populous South and in the West.

Posted in Economics, National Real Estate | 56 Comments