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    30-Year Mortgage Rate Dips to 6.46%; Home Sales Rise

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    Home buyers this week saw the lowest average rate since early 2023, and existing-home sales rebounded in July. Analysts predict more relief ahead.Mortgage rates dipped this week to a recent low, with analysts predicting a sharper drop in the coming months that could motivate potential home buyers.The average rate on 30-year mortgages, the most popular home loan in the United States, fell slightly to 6.46 percent this week, Freddie Mac reported on Thursday. That was only a slight decline from the 6.49 percent average a week earlier, but was the lowest level since May 2023. Mortgage rates, which stood at around 3 percent in late 2021, began climbing when the Federal Reserve started raising its benchmark rate to combat inflation, reaching levels not seen in two decades. The 30-year rate has been steadily easing since April, when it rose above 7 percent.Sam Khater, chief economist at Freddie Mac, said mortgage rates hovering below 6.5 percent over the past two weeks had not been enough to prompt a significant uptick in home purchases.“We expect rates likely will need to decline another percentage point to generate buyer demand,” Mr. Khater said in a statement.More significant relief could be on the horizon. The Fed is expected to start lowering interest rates in September, after holding them at 5.3 percent for the past year. Although the Fed’s benchmark rate and mortgage rates aren’t directly connected, a Fed rate cut could indirectly put even more downward pressure on mortgages.And while borrowing costs remain twice as high as three years ago, there is some evidence that home buyers are starting to respond to the small but steady decline. Existing-home sales rose above expectations in July after four consecutive monthly declines, according to data released on Thursday by the National Association of Realtors. The 1.3 percent increase lifted sales to a seasonally adjusted annual rate of 3.95 million units.Consumers are “definitely seeing more choices” as affordability improves, Lawrence Yun, the association’s chief economist, said in a statement. But existing home sales are still down 2.5 percent from the prior year.“Despite the modest gain, home sales are still sluggish,” Mr. Yun said.Potential home sellers also continue to feel locked into lower rates on their existing loans, keeping their houses off the market. The median existing-home owner has a rate below 4 percent, said Chen Zhao, who leads the housing economics team at the real estate services company Redfin.More homeowners are starting to list their properties for sale to keep up with demand, Skylar Olsen, chief economist at Zillow, said in a statement. But the number of homes available at any given time is still lower than before the pandemic, she said. More

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    What Kalamazoo (Yes, Kalamazoo) Reveals About the Nation’s Housing Crisis

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    A decade ago, the city — and all of Michigan — had too many houses. Now it has a shortage. The shift there explains today’s costly housing market in the rest of the country.For years, when Michigan politicians talked about the state’s housing problem, they were referring to a surplus: too many run-down houses, stripped of valuable copper, sitting empty and blighting neighborhoods. Now the message has flipped. In her State of the State address this year, Gov. Gretchen Whitmer lamented the housing shortage and landed one of her biggest applause lines with, “The rent is too damn high, and we don’t have enough damn housing. So our response is simple: ‘Build, baby, build!”If you want to know what the housing crisis for middle-income Americans looks like in 2024, spend some time in Michigan. The surplus-to-shortage whipsaw here is a mitten-shaped miniature of what the entire country has gone through.I’ve been writing about housing and the economy for two decades, and have watched as the nation’s housing market has made the journey from boom to bust to deficit, seemingly without pausing for a normal middle. There are lots of reasons this happened, but they center on a big one: the late-2000s housing bust, which the country has never fully recovered from. Or as Ali Wolf, chief economist at Zonda, a data and consulting firm, put it: “The Great Recession broke the U.S. housing market.”At first, rapidly rising housing costs seemed like a regional problem. It made sense that places like San Francisco, which was already expensive, filled with well-paid tech workers and hamstrung by stringent building regulations, would be in crisis. Much of the rest of the country was still affordable, however, so high-cost “superstar cities” were seen as an exception instead of a warning.Now California’s problem is everywhere. Double-income couples with good jobs are priced out of homeownership in Spokane, Wash. Homeless encampments sprawl in Phoenix. The rent is too damn high in Kalamazoo.The housing crisis has moved from blue states to red states, and large metro areas to rural towns. In a time of extreme polarization, the too-high cost of housing and its attendant social problems are among the few things Americans truly share. That and a growing rage about the country’s inability to fix it.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Harris and Trump Offer a Clear Contrast on the Economy

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    Both candidates embrace expansions of government power to steer economic outcomes — but in vastly different areas.Vice President Kamala Harris and former President Donald J. Trump flew to North Carolina this week to deliver what were billed as major speeches on the economy. Neither laid out a comprehensive policy plan — not Ms. Harris in her half-hour focus on housing, groceries and prescription drugs, nor Mr. Trump in 80 minutes of sprinkling various proposals among musings about dangerous immigrants.But in their own ways, both candidates sent voters clear and important messages about their economic visions. Each embraced a vision of a powerful federal government, using its muscle to intervene in markets in pursuit of a stronger and more prosperous economy.They just disagreed, almost entirely, on when and how that power should be used.In Raleigh on Friday, Ms. Harris began to put her own stamp on the brand of progressive economics that has come to dominate Democratic politics over the last decade. That economic thinking embraces the idea that the federal government must act aggressively to foster competition and correct distortions in private markets.The approach seeks large tax increases on corporations and high earners, to fund assistance for low-income and middle-class workers who are struggling to build wealth for themselves and their children. At the same time, it provides big tax breaks to companies engaged in what Ms. Harris and other progressives see as delivering great economic benefit — like manufacturing technologies needed to fight global warming, or building affordable housing.That philosophy animated the policy agenda that Ms. Harris unveiled on Friday. She pledged to send up to $25,000 in down-payment assistance to every first-time home buyer over four years, while directing $40 billion to construction companies that build starter homes. She said she would permanently reinstate an expanded child tax credit that President Biden temporarily established with his 2021 stimulus law, while offering even more assistance to parents of newborns.She called for a federal ban on corporate price gouging on groceries and for new federal enforcement tools to punish companies that unfairly push up food prices. “My plan will include new penalties for opportunistic companies that exploit crises and break the rules,” she said, adding: “We will help the food industry become more competitive, because I believe competition is the lifeblood of our economy.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    30-Year Home Mortgage Rate Falls to 6.47%

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    The key mortgage rate had its biggest one-week decline of the year, falling to the lowest level in 15 months.Mortgage rates have fallen to their lowest level in more than a year, a balm for prospective home buyers and sellers in a challenging real estate market.The average rate on 30-year mortgages, the most popular home loan in the United States, dropped to 6.47 percent this week, Freddie Mac reported on Thursday. That rate has been steadily easing since April, when it rose above 7 percent — a relief for not only buyers, but also potential sellers who have felt locked into lower rates on their existing loans and have kept their houses off the market.The decline, from 6.73 percent a week earlier, was the biggest this year.Mortgage rates stood at around 3 percent in late 2021. They began climbing when the Federal Reserve started raising its benchmark rate to combat inflation, reaching levels not seen in two decades.“The decline in mortgage rates does increase prospective home buyers’ purchasing power and should begin to pique their interest in making a move,” Sam Khater, Freddie Mac’s chief economist, said in a statement.The decline in mortgage rates could also allow existing homeowners to refinance, Mr. Khater said. The share of market mortgage applications that reflect refinancing was the highest in more than two years, according to Freddie Mac.The Fed is expected to start lowering interest rates in September after holding them at 5.3 percent for the past year. Investors increasingly anticipate that the initial cut will be half a percentage point.While the Fed’s benchmark rate and mortgage rates aren’t directly connected, a Fed rate cut could indirectly put even more downward pressure on mortgages. The 10-year U.S. Treasury yield, which underpins borrowing costs, dropped this week as panic ensued after a weaker-than-expected jobs report, contributing to the mortgage-rate movement.Sales of existing homes slipped 5.4 percent in June from a year earlier, according to the National Association of Realtors — a sign of continued sluggishness in the housing market. Homes sat on the market longer, and sellers received fewer offers.The lower mortgage rate could encourage some homeowners to get into the market, said Julia Fonseca, an assistant professor of finance at the University of Illinois at Urbana-Champaign. But as of March, nearly 60 percent of mortgage holders had rates of 4 percent or less, she added, still far from the current cost of borrowing.“It’s a step — but it’s a small step,” Ms. Fonseca said of the latest drop. “We’re moving in the direction of lowering borrowing costs and less lock-in, but we still have a ways to go if we consider how low these rates that people have locked in actually are.” More

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    Biden Rent Cap Proposal Reignites Housing Policy Debate

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    A proposal to make landlords’ tax breaks contingent on rent limits has drawn industry pushback, progressive applause and some alternative approaches.When the Biden administration laid out a suite of plans this week to address housing affordability, it added a bold update to previous proposals — and sent the housing industry and the economics world buzzing.The White House called on Congress to pass legislation giving “corporate landlords” — defined by the White House as those with over 50 rental units — a choice to cap annual rent increases on existing units at 5 percent annually or lose federal tax breaks based on property depreciation.The proposal is expected to go largely unaddressed this year, with Congress in campaign mode. But public reaction has been lively.Tenant organizations and progressive leaders generally allied with the administration’s economic team cheered the news. Yet a range of economists, Wall Street analysts, real estate groups and landlord associations responded with forceful critiques, assailing the limits as counterproductive.“Increasing the supply of affordable rental housing nationwide — not politically motivated and self-defeating rent control proposals floated during election campaigns — is the best way to alleviate affordability constraints for renters,” Robert D. Broeksmit, the president of Mortgage Bankers Association, said in a statement.The policy would affect about 20 million units in the country, roughly half of all rental properties.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    For L.G.B.T.Q. People, Moving to Friendlier States Comes With a Cost

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    Laws targeting gender-affirming care have uprooted thousands. But places that are more supportive can also be more expensive.When Stefanie Newell decided to move to Denver last year, the choice was about acceptance. Feeling comfortable as a transgender woman didn’t seem possible in San Antonio, her hometown, in the midst of a flood of Texas legislation targeting the L.G.B.T.Q. community.But the decision also had financial implications. In San Antonio, she lived with her mother, and the cost of living was generally low. Just driving her stuff two states north wiped out her savings.“I thought I was well prepared, and when I arrived I was flat broke,” said Ms. Newell, 25. And Denver isn’t cheap: Her one-bedroom apartment downtown costs about $1,800 a month, which she pays with a mix of part-time paralegal work, freelance writing and editing, and ad revenue from her content on Instagram. “It’s taken off to the point where I’m not in the negative,” she said. “It definitely gets close.”It’s a choice that gay, lesbian, bisexual and transgender people in the United States have made for decades: Move from a less welcoming part of the country to one, usually a coastal city, with more protections and a bigger community. The price of tolerance was higher rent.The need for relocation seemed to be declining in the 21st century, as gay marriage became the law of the land and pride went mainstream. But over the last two years, a flurry of laws banning transition care for transgender youths — variations of which are now on the books in 25 states — have sent more people in search of sanctuary.Even though most of the laws are based on gender identity rather than sexual orientation, the impact goes beyond transgender people. Abbie Goldberg, director of women’s and gender studies at Clark University in Worcester, Mass., regularly surveys L.G.B.T.Q. individuals and families. In one recent study, she found that Florida’s law restricting discussion of sexual identity in public schools made parents who are L.G.B.T.Q. more likely to want to leave the state.It’s More Expensive to Live in L.G.B.T.Q.-Friendly StatesPlaces that protect LG.B.T.Q. rights, as measured by the Movement Advancement Project’s accounting of supportive and restrictive laws, also tend to have a higher cost of living, expressed as a percentage of the national average.

    Source: Movement Advancement Project, Commerce DepartmentBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Here’s Where Climate Change Is Driving Up Home Insurance Rates

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    Source: Keys and Mulder, National Bureau of Economic Research (2024) Note: State average is shown in counties with few or no observations. Enid, Okla., surrounded by farms about 90 minutes north of Oklahoma City, has an unwelcome distinction: Home insurance is more expensive, relative to home values, than almost anywhere else in the country. Enid […] More

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    Apartments Could Be the Next Real Estate Business to Struggle

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    Owners of some rental buildings are starting to struggle because of rising interest rates and waning demand in some once booming Sun Belt cities.It might seem like a great time to own apartment buildings.For many landlords, it is. Rents have soared in recent years because of housing shortages across much of the country and a bout of severe inflation.But a growing number of rental properties, especially in the South and the Southwest, are in financial distress. Only some have stopped making payments on their mortgages, but analysts worry that as many as 20 percent of all loans on apartment properties could be at risk of default.Although rents surged during the pandemic, the rise has stalled in recent months. In many parts of the country, rents are starting to fall. Interest rates, ratcheted higher by the Federal Reserve to combat inflation, have made mortgages much more expensive for building owners. And while homes remain scarce in many places, developers may have built too many higher-end apartments in cities that are no longer attracting as many renters as they were in 2021 and 2022, like Houston and Tampa, Fla.These problems haven’t yet turned into a crisis, because most owners of apartment buildings, known in the real estate industry as multifamily properties, haven’t fallen behind on loan payments.Only 1.7 percent of multifamily loans are at least 30 days delinquent, compared with roughly 7 percent of office loans and around 6 percent of hotel and retail loans, according to the Commercial Real Estate Finance Council, an industry association whose members include lenders and investors.But many industry groups, rating agencies and research firms are worried that many more apartment loans could become distressed. Multifamily loans make up a majority of loans newly added to watch lists compiled by industry experts.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More