US home sales fall in June as prices soar to new heights
Existing home sales fell 2.7% last month from May to a seasonally adjusted annual rate of 3.93 million units, the National Association of Realtors said Wednesday.
Sales were flat compared with June last year. The latest home sales fell short of the 4.01 million pace economists were expecting, according to FactSet.
Home prices increased on an annual basis for the 24th consecutive month. The national median sales price rose 2% in June from a year earlier to $435,300, an all-time high.
The U.S. housing market has been in a slump since early 2022, when mortgage rates began to climb from pandemic-era lows. Home sales fell last year to their lowest level in nearly 30 years.
So far this year, the average rate on a 30-year mortgage has remained relatively close to 7%, according to mortgage buyer Freddie Mac.
Home shoppers who can afford to buy at current mortgage rates or pay in cash are benefiting from more properties on the market.
There were 1.53 million unsold homes at the end of last month, down 0.6% from May, but up nearly 16% from June last year, NAR said. That's still well below the roughly 2 million homes for sale that was typical before the pandemic, however.
June's month-end inventory translates to a 4.7-month supply at the current sales pace, up from a 4.6-month pace at the end of May and 4 months in June last year. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.
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Winnipeg Free Press
an hour ago
- Winnipeg Free Press
Higher US tariffs part of the price Europe was willing to pay for its security and arms for Ukraine
BRUSSELS (AP) — France's prime minister described it as a 'dark day' for the European Union, a 'submission' to U.S. tariff demands. Commentators said EU Commission chief Ursula von der Leyen's handshake with President Donald Trump amounted to capitulation. The trouble is, Europe depends mightily on the United States, and not just for trade. Mirroring Trump, Von der Leyen gushed that the arrangement she endorsed over the weekend to set U.S. tariff levels on most European exports to 15%, which is 10% higher than currently, was 'huge.' Her staff texted reporters insisting that the pact, which starts to enter force on Friday, is the 'biggest trade deal ever.' A month after NATO Secretary-General Mark Rutte ingratiated himself with Trump by referring to him as 'daddy,' the Europeans had again conceded that swallowing the costs and praising an unpredictable president is more palatable than losing America. 'It's not only about the trade. It's about security. It's about Ukraine. It's about current geopolitical volatility. I cannot go into all the details,' EU Trade Commissioner Maroš Šefčovič told reporters Monday. 'I can assure you it was not only about the trade,' he insisted, a day after 'the deal' was sealed in an hour-long meeting once Trump finished playing a round of golf with his son at the course he owns in Scotland. The state of Europe's security dependency Indeed, Europe depends on the U.S. for its security and that security is anything but a game, especially since Russia invaded Ukraine. U.S. allies are convinced that, should he win, President Vladimir Putin is likely to take aim at one of them next. So high are these fears that European countries are buying U.S. weapons to help Ukraine to defend itself. Some are prepared to send their own air defense systems and replace them with U.S. equipment, once it can be delivered. 'We're going to be sending now military equipment and other equipment to NATO, and they'll be doing what they want, but I guess it's for the most part working with Ukraine,' Trump said Sunday, sounding ambivalent about America's role in the alliance. The Europeans also are wary about a U.S. troop drawdown, which the Pentagon is expected to announce by October. Around 84,000 U.S. personnel are based in Europe, and they guarantee NATO's deterrent effect against an adversary like Russia. At the same time, Trump is slapping duties on America's own NATO partners, ostensibly due to concerns about U.S. security interests, using Section 232 of the Trade Expansion Act, a logic that seems absurd from across the Atlantic. Weaning Europe off foreign suppliers 'The EU is in a difficult situation because we're very dependent on the U.S. for security,' said Niclas Poitiers at the Bruegel research institution in Brussels. 'Ukraine is a very big part of that, but also generally our defense is underwritten by NATO.' 'I think there was not a big willingness to pick a major fight, which is the one (the EU) might have needed with the U.S.' to better position itself on trade, Poitiers told The Associated Press about key reasons for von der Leyen to accept the tariff demands. Part of the agreement involves a commitment to buy American oil and gas. Over the course of the Russia-Ukraine war, now in its fourth year, most of the EU has slashed its dependence on unreliable energy supplies from Russia, but Hungary and Slovakia still have not. 'Purchases of U.S. energy products will diversify our sources of supply and contribute to Europe's energy security. We will replace Russian gas and oil with significant purchases of U.S. LNG, oil and nuclear fuels,' von der Leyen said in Scotland on Sunday. In essence, as Europe slowly weans itself off Russian energy it is also struggling to end its reliance on the United States for its security. The Trump administration has warned its priorities now lie elsewhere, in Asia, the Middle East and on its own borders. That was why European allies agreed at NATO's summit last month to spend hundreds of billions of dollars more on defense over the next decade. Primarily for their own security, but also to keep America among their ranks. The diplomacy involved was not always elegant. 'Europe is going to pay in a BIG way, as they should, and it will be your win,' Rutte wrote in a private text message to Trump, which the U.S. leader promptly posted on social media. Rutte brushed off questions about potential embarrassment or concern that Trump had aired it, saying: 'I have absolutely no trouble or problem with that because there's nothing in it which had to stay secret.' A price Europe feels it must pay Von der Leyen did not appear obsequious in her meeting with Trump. She often stared at the floor or smiled politely. She did not rebut Trump when he said that only America is sending aid to Gaza. The EU is world's biggest supplier of aid to the Palestinians. With Trump's threat of 30% tariffs hanging over European exports — whether real or brinksmanship is hard to say — and facing the prospect of a full-blown trade dispute while Europe's biggest war in decades rages, 15% may have been a cheap price to pay. Monday Mornings The latest local business news and a lookahead to the coming week. 'In terms of the economic impact on the EU economy itself, it will be negative,' Poitiers said. 'But it's not something that is on a comparable magnitude like the energy crisis after the Russian invasion of Ukraine, or even COVID.' 'This is a negative shock for our economy, but it is something that's very manageable,' he said. It remains an open question as to how long this entente will last. ___ Mark Carlson in Brussels contributed to this report.
Winnipeg Free Press
an hour ago
- Winnipeg Free Press
Union Pacific announces bid for Norfolk Southern to create transcontinental railroad
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Winnipeg Free Press
an hour ago
- Winnipeg Free Press
Trump's tariffs could squeeze US factories and boost costs by up to 4.5%, a new analysis finds
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The success of Trump's policies ultimately depends on whether everyday Americans become wealthier and factory towns experience revivals, a goal outside economists say his Republican administration is unlikely to meet with tariffs. Trump has announced new frameworks with the European Union, Japan, the Philippines, Indonesia and Britain that would each raise the import taxes charged by the United States. He's prepared to levy tariffs against goods from dozens of other countries starting on Friday in the stated range of 15% to 50%. The U.S. stock market has shown relief the tariff rates aren't as high as Trump initially threatened in April and hope for a sense of stability going forward. Trump maintains the tariff revenues will whittle down the budget deficit and help whip up domestic factory jobs, all while playing down the risks of higher prices. 'We've wiped out inflation,' Trump said last Friday before boarding Marine One while on his way to Scotland. But there's the possibility of backlash in the form of higher prices and slower growth once tariffs flow more fully through the world economy. A June survey by the Atlanta Federal Reserve suggested companies would on average pass half of their tariff costs onto U.S. consumers through higher prices. Labor Department data shows America lost 14,000 manufacturing jobs after Trump rolled out his April tariffs, putting a lot of pressure as to whether a rebound starts in the June employment report coming out Friday. With new tariffs in place, there are new costs for factories The Washington Center for Equitable Growth analysis shows how Trump's devotion to tariffs carries potential economic and political costs for his agenda. In the swing states of Michigan and Wisconsin, more than 1 in 5 jobs are in the critical sectors of manufacturing, construction, mining and oil drilling and maintenance that have high exposures to his import taxes. The artificial intelligence sector Trump last week touted as the future of the economy is dependent on imports. More than 20% of the inputs for computer and electronics manufacturing are imported, so the tariffs could ultimately magnify a hefty multitrillion-dollar price tag for building out the technology in the U.S. The White House argues American businesses will access new markets because of the trade frameworks, saying companies will ultimately benefit as a result. 'The 'Made in USA' label is set to resume its global dominance under President Trump,' White House spokesman Kush Desai said. Still lots of uncertainty, but world economy faces a new toll There are limits to the analysis. Trump's tariff rates have been a moving target, and the analysis looks only at additional costs, not how those costs will be absorbed among foreign producers, domestic manufacturers and consumers. Also, the legal basis of the tariffs as an 'emergency' act goes before a U.S. appeals court on Thursday. Treasury Secretary Scott Bessent said in an interview last week on Fox Business Network's 'Kudlow' show countries were essentially accepting the tariffs to maintain access to the U.S. market. 'Everyone is willing to pay a toll,' he said. But what Bessent didn't say is U.S. manufacturers are also paying much of that toll. 'We're getting squeezed from all sides,'' said Justin Johnson, president of Jordan Manufacturing Co. in Belding, Michigan, northeast of Grand Rapids. His grandfather founded the company in 1949. The company, which makes parts used by Amazon warehouses, auto companies and aerospace firms, has seen the price of a key raw material — steel coil — rise 5% to 10% this year. Trump has imposed 50% tariffs on imported steel and aluminum. Jordan Manufacturing doesn't buy foreign steel. But by crippling foreign competition, Trump's tariffs have allowed domestic U.S. steelmakers to hike prices. Johnson doesn't blame them. 'There's no red-blooded capitalist who isn't going to raise his prices'' under those circumstances, he said. Trump says no inflation from tariffs, but businesses see higher prices The Trump White House insists inflation is not surfacing in the economy, issuing a report through the Council of Economic Advisers this month saying the price of imported goods fell between December of last year and this past May. 'These findings contradict claims that tariffs or tariff-fears would lead to an acceleration of inflation,' the report concludes. Ernie Tedeschi, director of economics at the Budget Lab at Yale University, said that the more accurate measure would be to compare the trends in import prices with themselves in the past and that the CEA's own numbers show 'import prices have accelerated in recent months.' The latest estimate from the Budget Lab at Yale is the tariffs would cause the average household to have $2,400 less than it would otherwise have. Keeping the economy on a knife's edge Josh Smith, founder and president of Montana Knife Co., called himself a Trump voter but said he sees the tariffs on foreign steel and other goods as threatening his business. Monday Mornings The latest local business news and a lookahead to the coming week. For instance, Smith just ordered a $515,000 machine from Germany that grinds his knife blades to a sharp edge. Trump had imposed a 10% tax on products from the EU that is set to rise to 15% under the trade framework he announced Sunday. So Trump's tax on the machine comes to $77,250 — about enough for Smith to hire an entry-level worker. Smith would happily buy the bevel-grinding machines from an American supplier. But there aren't any. 'There's only two companies in the world that make them, and they're both in Germany,'' Smith said. Then there's imported steel, which Trump is taxing at 50%. Until this year, Montana Knife bought the powdered steel it needs from Crucible Industries in Syracuse, New York. But Crucible declared bankruptcy last December, and its assets were purchased by a Swedish firm, Erasteel, which moved production to Sweden. Smith beat the tariffs by buying a year's worth of the steel in advance. But starting in 2026, the specialty steel he'll be importing from Sweden is set to be hit with a 50% duty. 'The average American is not sitting in the position I am, looking at the numbers I am and making the decisions each day, like, 'Hey, we cannot hire those extra few people because we might have to pay this tariff on this steel or this tariff on this grinder,'' he said. 'I want to buy more equipment and hire more people. That's what I want to do.'
