This is Mary Walden with economist MW welcoming you to the economic perspective. Today’s program asks if slow home sales are a signal of the future. Mike, home sales have dipped in recent months, despite falling mortgage interest rates. Does this trend forecast something bad for the economy?
Mike: Summary Answer
- Home sales have never recovered to their pre-recessionary levels
- Probably good because those levels were unsustainable and often based on speculation
- Also, we’re not seeing the buying from young households as they contend with student loan debt and are postponing families
- 2017 tax act reduced some of tax advantages of owning
- But weakness of the market has importantly been driven by supply – we’ve no seen builders construct homes for the expected demand
- Still, the recent weakness should be temporary as inventory of homes has risen, homes are selling rapidly, and mortgage rates have declined
- So expect a pickup in home sales
- I’m MW
Mary: And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.