Home sales in a rut

Home sales

Mortgage rates near historic lows haven’t helped. Neither has a solid job market. Sales of existing homes have tumbled 2.2% from a year ago to an annual pace of 5.27 million, according to the National Association of Realtors. All the factors that would normally encourage more purchases have failed to lift real estate out of its rut. There appear to be two major problems right now: Home prices are high. And there aren’t enough homes listed for sale. The problem is especially evident when prices are broken down by tier: Sales of homes priced under $250,000 have declined more than 10% from a year ago. The drop reflects a lack of entry-level homes on the market, leaving would-be buyers unable to purchase. But there has also been a drop-off in sales of homes priced above $750,000. These homes cost more than what most Americans can afford, given how the wealth gap has widened during the decade-long economic expansion. The result, for now, is that there aren’t enough homes at the bottom of the market and not enough affluent buyers at the top.