That weak demand has actually resulted in slight price decreases: Redfin reported that prices fell in 39 of the top 50 housing markets in July.
Chen Zhao, the head of economics research at Redfin, said that sellers have responded to the weak demand by pulling listings.
“When prices weaken, sellers pull back,” Zhao said.
New home construction has slowed as well, as Census Bureau data shows new home completions in July were down 6% from one year ago. Dietz said builders face a number of challenges, from weak buyer demand to high import prices due to President Donald Trump’s tariffs.
The president’s immigration crackdown is also having an effect. As many as 30% of workers in the home construction industry are foreign born, and Dietz said that he’s heard more and more stories from builders of crews having run-ins with immigration officers or simply failing to show up to a job out of fear.
“The anecdotes I hear are happening with triple the frequency I heard back in March and April,” Deitz said.
The housing industry will be looking to the Federal Reserve’s Sept. 17 meeting. Fed Chair Jerome Powell signaled last week that the central bank is likely to cut its benchmark rate following July’s unexpectedly weak jobs report and concerns of a softening economy. However, he did not specify when a rate cut may happen.
While the Fed cutting its key interest rate isn’t a cure-all, Zhao said that it could provide pressure to mortgage lenders to lower their rates, which could lure potential buyers back into the market.
“Based on what our agents are telling us, a lot of people are waiting for these rate cuts,” Zhao said.
Joe Murphy and Jasmine Cui contributed.
