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Sales of previously occupied U.S. homes remained sluggish in August, even as a late-summer slide in mortgage rates brought home loan borrowing costs to a 10-month low. Existing home sales slipped 0.2% last month from July to a seasonally adjusted annual rate of 4 million units, the National Association of Realtors said Thursday. Thats the slowest sales pace since June. Sales rose 1.8% compared with August last year. The latest sales figure topped the 3.96 million pace economists were expecting, according to FactSet. The national median sales price increased 2% in August from a year earlier to $422,600. Thats the 26th consecutive month that home prices have risen on an annual basis and the highest median sales price for any August on data going back to 1999. The U.S. housing market has been in a sales slump since 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years. Through the first eight months of this year, home sales are down 1.2% compared to the same period last year. Mortgage rates have been mostly declining since late July ahead of the Federal Reserves widely anticipated decision last week to cut its main interest rate for the first time in a year amid growing concern over the U.S. job market. But while lower rates give home shoppers more purchasing power, borrowing costs remain too high for many Americans to afford to buy a home following years of skyrocketing home prices. Consider, the U.S. median home sales price is now 52% higher than it was in August 2019, before the housing market superheated during the initial years of the pandemic. However, mortgage rates are declining and more inventory is coming to the market, which should boost sales in the coming months, said Lawrence Yun, NARs chief economist. Homes purchased last month likely went under contract in June and July, when the average rate on a 30-year mortgage ranged from 6.85% to 6.72%, according to Freddie Mac. The decline in mortgage rates accelerated in August and this month, dropping the average rate as low as 6.26% last week. Homebuilders have had success drumming up sales by lowering prices and offering incentives, including paying to lower mortgage rates for home shoppers who may not be able to afford to buy at current rates. Sales of new single-family U.S. homes jumped 20.5% in August from the previous month to a seasonally adjusted annual rate of 800,000 units, the U.S. Census Bureau reported Wednesday. Sales were up 15.4% from a year earlier, the strongest pace so far this year, but are still running about 1.4% lower than a year ago. However, new home sales are a small fraction of the overall housing market, which remains constrained by lack of affordability and a chronic shortage of homes for sale, especially those in the more affordable end of the market. That trend has weighed especially on first-time homebuyers, who dont have home equity gains to put toward a new home purchase. They accounted for 28% of homes sales last month. Historically, they made up 40% of home sales. Still, the inventory of homes for sale across the U.S. has increased gradually as the market has slowed and is now at a level where supply and demand are more balanced. There were 1.53 million unsold homes at the end of last month, down 1.3% from July and up 11.7% from August last year, NAR said. Thats still well below the roughly 2 million homes for sale that was typical before the pandemic. Augusts month-end inventory translates to a 4.6-month supply at the current sales pace, matching the supply level at the end of July and an increase from 4.2 months in August last year. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers. Homes are also taking longer to sell. Properties typically remained on the market for 31 days last month before selling, up from 26 days a year earlier, NAR said. The longer homes linger on the market, the more pressure it puts on homeowners eager to sell to give buyers a better deal. That’s led to more sellers lowering prices. A little over 20% of homes on the market in August had their initial listing price lowered, according to Realtor.com. If mortgage rates continue to ease, that should help bring out more buyers, but economists’ forecasts generally call for the average rate on a 30-year mortgage to remain above 6% this year. Despite improvement, rates are still not low enough to unlock the vast majority of homeowners, who continue to enjoy sub 6% rates, but it will help those on the margins and may lead to a more active fall home sales season, said Danielle Hale, chief economist at Realtor.com. By Alex Veiga, AP business writer
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E-Commerce
Alan Greenspan, Ben Bernanke, Janet Yellen and other former top economic officials appointed by presidents of both parties urged the Supreme Court on Thursday to preserve the Federal Reserve’s political independence and allow Lisa Cook to remain as a central bank governor for now. The justices are weighing an emergency appeal from the administration to remove Cook while her lawsuit challenging her firing by Republican President Donald Trump proceeds through the courts. The White House campaign to unseat Cook marks an unprecedented bid to reshape the Fed board, which was designed to be largely independent from day-to-day politics. No president has fired a sitting Fed governor in the agencys 112-year history. Earlier in September, a judge determined that Trump’s move to fire Cook probably was illegal. An appeals court rejected an emergency plea to oust Cook before the Fed’s meeting last week when Cook joined in a vote to cut a key interest rate by one-quarter of a percentage point. A day after that meeting, the administration turned to the Supreme Court and again asked for her prompt removal. In their filing, lawyers for the former economic officials wrote that immediately ousting Cook would expose the Federal Reserve to political influences, thereby eroding public confidence in the Feds independence and jeopardizing the credibility and efficacy of U.S. monetary policy. Greenspan, Bernanke, and Yellen served as successive chairs of the Fed’s seven-member board of governors, spanning six presidential administrations back to 1987. Greenspan and Bernanke were initially appointed by Republican Presidents Ronald Reagan and George W. Bush, respectively. President Barack Obama, a Democrat, nominated Yellen to the Fed and she was Democratic President Joe Biden’s treasury secretary. The list of signatories includes other treasury secretaries, heads of the Council of Economic Advisers and former Sen. Phil Gramm, R-Texas, a former chairman of the Senate Banking, Housing and Urban Affairs Committee. Trump sought to fire Cook on Aug. 25, but a judge ruled that she could remain in her job. Trump has accused Cook of mortgage fraud because she appeared to claim two properties, in Michigan and Georgia, as primary residences in June and July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and a smaller down payment than if one of them was declared as a rental property or second home. Cook has denied any wrongdoing and has not been charged with a crime. According to documents obtained by The Associated Press, Cook did specify that her Atlanta condo would be a vacation home, according to a loan estimate she obtained in May 2021. In a form seeking a security clearance, she described it as a 2nd home. Both documents appear to undercut the administrations claims of fraud. The attempt to fire Cook differs from Trump’s dismissal of board members of other independent agencies. Those firings, including at the National Labor Relations Board, Federal Trade Commission and Consumer Product Safety Commission, have been done at will. In allowing those firings to proceed for now, the Supreme Court cautioned that it viewed the Fed differently. Trump has invoked the provision of the law that set up the Federal Reserve and allowed for governors to be dismissed for cause. Mark Sherman, Associated Press
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E-Commerce
In a rural corner of Louisiana, Meta is building one of the world’s largest data centers, a $10 billion behemoth as big as 70 football fields that will consume more power in a day than the entire city of New Orleans at the peak of summer. While the colossal project is impossible to miss in Richland Parish, a farming community of 20,000 residents, not everything is visible, including how much the social media giant will pay toward the more than $3 billion in new electricity infrastructure needed to power the facility. Watchdogs have warned that in the rush to capitalize on the AI-driven data center boom, some states are allowing massive tech companies to direct expensive infrastructure projects with limited oversight. Mississippi lawmakers allowed Amazon to bypass regulatory approval for energy infrastructure to serve two data centers it is spending $10 billion to build. In Indiana, a utility is proposing a data center-focused subsidiary that operates outside normal state regulations. And while Louisiana says it has added consumer safeguards, it lags behind other states in its efforts to insulate regular power consumers from data center-related costs. Mandy DeRoche, an attorney for the environmental advocacy group Earthjustice, says there is less transparency due to confidentiality agreements and rushed approvals. “You can’t follow the facts, you can’t follow the benefits or the negative impacts that could come to the service area or to the community,” DeRoche said. Private deals for public power supply Under contract with Meta, power company Entergy agreed to build three gas-powered plants that would produce 2,262 megawatts equivalent to a fifth of Entergy’s current power supply in Louisiana. The Public Service Commission approved Meta’s infrastructure plan in August after Entergy agreed to bolster protections to prevent a spike in residential rates. Nonetheless, nondisclosure agreements conceal how much Meta will pay. Consumer advocates tried but failed to compel Meta to provide sworn testimony, submit to discovery and face cross-examination during a regulatory review. Regulators reviewed Meta’s contract with Entergy, but were barred from revealing details. Meta did not address AP’s questions about transparency, while Louisiana’s economic development agency and Entergy say nondisclosure agreements are standard to protect sensitive commercial data. Davante Lewis the only one of five public service commissioners to vote against the plan said he’s still unclear how much electricity the center will use, if gas-powered plants are the most economical option nor if it will create the promised 500 jobs. “There’s certain information we should know and need to know but don’t have,” Lewis said. Additionally, Meta is exempt from paying sales tax under a 2024 Louisiana law that the state acknowledges could lead to “tens of millions of dollars or more each year” in lost revenue. Meta has agreed to fund about half the cost of building the power plants over 15 years, including cost overruns, but not maintenance and operation, said Logan Burke, executive director of the Alliance for Affordable Energy, a consumer advocacy group. Public Service Commission Jean-Paul Coussan insists there will be “very little” impact on ratepayers. But watchdogs warn Meta could pull out of or not renew its contract, leaving the public to pay for the power plants over the rest of their 30-year life span, and all grid users are expected to help pay for the $550 million transmission line serving Meta’s facility. Ari Peskoe, director of Harvard University’s Electricity Law Initiative, said tech companies should be required to pay “every penny so the public is not left holding the bag.” How is this tackled in other states? Elsewhere, tech companies are not being given such leeway. More than a dozen states have taken steps to protect households and business ratepayers from paying for rising electricity costs tied to energy-hungry data centers. Pennsylvania’s utilities commission is drafting a model rate structure to insulate customers from rising costs related to data centers. New Jersey’s utilities regulators are studying whether data centers cause “unreasonable” cost increases for other users. Oregon passed legislation this year ordering utilities regulators to develop new, and likely higher, power rates for data centers. And in June, Texas implemented what it calls a ‘kill switch’ law empowering grid operators to order data centers to reduce their electrical load during emergencies. Locals have mixed feelings Some Richland Parish residents fear a boom-and-bust cycle once construction ends. Others expect a boost in school and health care funding. Meta said it plans to invest in 1,500 megawatts of renewable energy in Louisiana and $200 million in water and road infrastructure in Richland Parish. “We don’t come from a wealthy parish and the money is much needed,” said Trae Banks, who runs a drywall business that has tripled in size since Meta arrived. In the nearby town of Delhi, Mayor Jesse Washington believes the data center will eventually have a positive impact on his community of 2,600. But for now, the construction traffic frustrates residents and property prices are skyrocketing as developers try to house thousands of construction workers. More than a dozen low-income families were evicted from a trailer park whose owners are building housing for incoming Meta workers, Washington says. “We have a lot of concerned people they’ve put hardship on a lot of people in certain areas here,” the mayor said. “I just want to see people from Delhi benefit from this.” Brook reported from New Orleans. Brook is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Jack Brook and Sophie Bates, Associated Press/Report for America
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E-Commerce
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