Existing Home Sales Extend Fall, Bank CEOs Warn Congress of Economic 'Slowdown'
Existing Home Sales Fall for Seventh Month
Sales of existing single-family homes declined for the seventh consecutive month in August, a prominent trade group reported Wednesday, the latest sign of a U.S. housing slowdown.
The National Association of Realtors said existing home sales dropped 0.4% from July and 19.9% from August 2021. The median price for existing homes sold during August rose 7.7% from a year earlier, to $389,500. Rising prices and interest rates are among factors cited for an overall decline in new and existing home sales for the past several months.
“The housing sector is the most sensitive to and experiences the most immediate impacts from the Federal Reserve’s interest rate policy changes,” Lawrence Yun, the trade group’s chief economist, said in a statement. He referred to the Fed’s recent hikes in its key lending rate, which in turn have raised rates for other types of borrowing including home mortgages.
“Nonetheless, homeowners are doing well with near nonexistent distressed property sales and home prices still higher than a year ago,” Yun said.
The trade group noted that after five successive monthly increases, the inventory of unsold existing homes declined to 1.28 million by the end of August, the equivalent of 3.2 months of inventory at the current sales pace. The August inventory was down 1.5% from July and unchanged from August 2021.
“Inventory will remain tight in the coming months and even for the next couple of years,” Yun said. “Some homeowners are unwilling to trade up or down after locking in historically low mortgage rates in recent years, increasing the need for more new-home construction to boost supply.”
Bank CEOs Warn Congress of Economic 'Slowdown'
CEOs from seven of the nation’s largest banks, including JPMorgan Chase, Citigroup and Wells Fargo, came before Congress on Wednesday as some warned of potential lingering economic distress from consumer inflation and interest rate hikes.
“We’re very concerned about the high prices consumers are facing in America and indeed around the world,” Citigroup CEO Jane Fraser told the House Financial Services Committee, according to several media reports.
Fraser said Federal Reserve rate hikes designed to tame inflation, currently at a 40-year high of 8.3%, will probably moderate global economic growth “and will be putting pressure on many drivers of the economy.”
JPMorgan Chase CEO Jamie Dimon reiterated his past warnings of potential tough times ahead, spurred by the Russia-Ukraine war, inflation, interest rates and still-high oil and gas prices. “Those things will absolutely cause a slowdown in the economy and at one point increase unemployment,” Dimon told the House committee.