Home prices zoomed higher in recent years, and mortgage rates are climbing. Buyers are queasy.
PLANO, Texas—A half-hour drive straight north from downtown Dallas sits one of the fastest-growing counties in the country. Cotton fields have been replaced with Toyota’s new North American headquarters, a Dallas Cowboys training facility and a sand-colored shopping strip with a Tesla dealership and a three-story food hall.
Yet even with the booming growth, Dallas’s once vibrant housing market is sputtering. In the high-end subdivisions in the suburb of Frisco, builders are cutting prices on new homes by up to $150,000. On one street alone, $4 million of new homes sat empty on a visit earlier this month. Some home builders are so desperate to attract interest they are offering agents the chance to win Louis Vuitton handbags or Super Bowl tickets with round-trip airfare, if their clients buy a home. Yet fresh-baked cookies sit uneaten at sparsely attended open houses.
The U.S. economy just had one of its best six-month stretches in a decade, as the unemployment rate hovers around its lowest level in half a century. Still, along with a recent swoon in the stock market, the housing market—which makes up a sixth of the U.S. economy—has been a troubling weak spot.
U.S. existing home sales have declined on an annual basis for eight straight months, the longest slump in more than four years, according to the National Association of Realtors report Wednesday. The slowdown has been driven by places that had earlier seen some of the strongest price growth during this recovery, including Seattle, Denver, New York City, Boston and the Bay Area.
Dallas, which had the second-strongest annual increase in employment of any metropolitan area in the country in September, helps explain why. Even though the economy in the sprawling metro area has boomed, home prices have grown much faster than wages, and buyers have been straining to afford homes.
Farm bankruptcies are on the rise in the Upper Midwest, according to a new report from the Federal Reserve, doubling from their recent lows in 2014.
At least 84 farms filed for bankruptcy from June 2017 to June 2018 in Wisconsin, Minnesota, Montana, and North and South Dakota, according to analysis from the Federal Reserve Bank of Minneapolis.
The report released earlier this month shows that over the same time period in 2014, 32 farms filed for bankruptcy.
The numbers have increased steadily since then, with 46 bankruptcies reported in 2015, 60 bankruptcies reported in 2016 and 67 reported in 2017.
In 2010, 70 bankruptcies were reported in the five states, but that was following the financial collapse of 2008–2009 and a brutal recession.
Some experts fear the worst is yet to come amid falling commodity prices and the Trump administration’s battles with China and other countries on trade.
“Current price levels and the trajectory of the current trends suggest that this trend has not yet seen a peak,” wrote Ron Wirtz, an analyst at the Minneapolis Federal Reserve Bank.