The Economic Perspective: “Are Slow Home Sales a Signal of the Future?”

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

  1. Home sales have never recovered to their pre-recessionary levels
  2. Probably good because those levels were unsustainable and often based on speculation
  3. Also, we’re not seeing the buying from young households as they contend with student loan debt and are postponing families
  4. 2017 tax act reduced some of tax advantages of owning
  5. But weakness of the market has importantly been driven by supply – we’ve no seen builders construct homes for the expected demand
  6. Still, the recent weakness should be temporary as inventory of homes has risen, homes are selling rapidly, and mortgage rates have declined
  7. So expect a pickup in home sales
  8. 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.