Tags: Housing | Sales | Homes | Economy

WSJ: Sluggish Housing Sales Threaten Economy

By    |   Saturday, 26 July 2014 02:54 PM

New home sales plunged 8.1 percent in June, putting the decline at 4.9 percent for the first half of the year, and that's not good news for the economy.

"Housing has clearly been a notable area of persistent sluggishness beyond early-year weather disruptions," Ted Wieseman, an economist at Morgan Stanley, told The Wall Street Journal.

The economy contracted 2.9 percent in the first quarter, though many analysts expect it to grow nearly 3 percent for the rest of the year.

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Home sales have suffered from buyers' lingering fear after last decade's housing bust, the sharp rise of home prices last year and the surge of student-loan debt, John Burns, CEO of John Burns Real Estate Consulting, told The Journal.

"I just think there's a real lack of confidence to buy a home and take on a mortgage right now," he said.

Paltry wage growth — 2 percent over the 12 months through June—also is hampering home sales, experts say.

"The labor market may be getting better, but wage gains are not. And until that happens, families will not be buying new homes at any great pace," Joel Naroff, president of Naroff Economic Advisors in Holland, Pa., and a member of the Newsmax Financial Braintrust Alliance, told The Journal.

Others see weakness too.

"It’s really been a rental-driven housing recovery," independent economist Gary Shilling told Reuters. "It's really new homebuilders that buy starter houses, and sellers can then buy next-higher-price houses. So it hasn't been a very solidly-based recovery, and it’s really stalled out."

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New home sales plunged 8.1 percent in June, putting the decline at 4.9 percent for the first half of the year, and that's not good news for the economy.
Housing, Sales, Homes, Economy
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2014-54-26
Saturday, 26 July 2014 02:54 PM
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