Several indicators suggest that housing demand in the United States is weakening because of high prices, slow wage growth and rising mortgage rates. File Photo by Roger L. Wollenberg/UPI | License Photo
Aug. 1 (UPI) -- Demand for housing fell in the United States in June, a decline experts say could negatively impact the domestic economy.
Residential investment, including the costs of construction and brokers' fees, fell in the second quarter of 2018, a report on U.S. economic growth showed. It was the third decline in the past four quarters.
Existing-home sales fell for a third straight month, the National Association of Realtors said.
The U.S. Census Bureau reported that construction of new residential buildings also fell in June.
Real estate website Redfin said housing demand fell 9.6 percent from a year ago, the largest year-to-year drop since 2016.
Tours of homes by prospective buyers in 15 large markets fell 6.1 percent and the number of homes for sale in markets it covers declined by nearly 4 percent.
Experts say high home prices, few listings for affordable first homes and rising mortgage rates are weighing down the real estate market. The industry is regarded as a predictor of future economic activity.
While economists warn that monthly housing data is frequently revised, they say a downward trend in key indicators is evident.
"It's very hard to escape the conclusion that the market has peaked for this cycle, given the rise in mortgage rates since last fall and the gradual tightening of lending standards," Ian Shepherdson, chief economist at Pantheon Macroeconomics, said.
Jonathan Miller, of real estate appraiser Miller Samuel, said luxury home sales have slowed because of uncertainty regarding the new U.S. tax law. Also, the market for less-expensive housing has "crossed an affordability threshold," he said, citing years of increasing prices, low supply of homes, slow wage growth and rising mortgage rates.