Home sales drop more than 14% so far in 2023

Chattanooga-area home sales dropped more than 14% in the first seven months of 2023 as higher mortgage rates spurred by the Federal Reserve Board’s tightening limited home purchases for the second consecutive year from the record highs reached in 2021.

More than 5,950 homes were sold from January through July of this year, down from the 6,928 sold in the same period a year earlier, the Greater Chattanooga Association of Realtors reported.

Despite the drop in sales, home prices remained elevated in Chattanooga. The median price of homes sold last month was up again to $325,000. Nationwide, the median sales price for homes sold in July was $410,200, or less than 1% below the all-time high of $413,800 recorded in June 2022, according to the National Association of Realtors.

“Mortgage rates have approached 7% in recent months, leading many prospective buyers to put their home purchase plans temporarily on hold,” the Greater Chattanooga Association of Realtors reported in its July multiple listing service report. “But higher rates have also kept many existing homeowners from listing their homes for fear of giving up the low-rate mortgages they locked in a few years ago, when rates were significantly lower.

New listings in the Chattanooga region were down 21% from a year ago.

“With only 3.1 months’ supply heading into July, the lack of inventory has boosted competition among buyers and put upward pressure on sales prices, especially in more affordable markets, where competition for homes remains particularly strong,” the real estate association said in its monthly report.

Chattanooga gas prices drop after five-week rise

After five weeks of rising gasoline prices, the average price of regular gas in Chattanooga declined by 9.1 cents a gallon in the past week, dropping to an average of $3.34 per gallon for regular gas, according to GasBuddy’s survey of 170 stations in Chattanooga.

The online gasoline pricing service reported Monday that Chattanooga gas prices are 48 cents a gallon below the U.S. average of $3.82 a gallon. But Chattanooga motorists are still paying an average of nearly 37 cents a gallon more for regular gas than they did a month ago and are paying just a couple of pennies less per gallon than a year ago when gas prices jumped with the rebound in traffic after the pandemic eased and the Ukraine war upset global energy markets.

Gasoline prices “could climb slightly higher as we get closer to Labor Day, as oil prices remain under pressure from recent OPEC+ production cuts,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in a report Monday.

“Motorists will likely see a mixed bag at the pump this week, with a few states seeing prices fall slightly, while others will see the opposite,” De Haan said.

In the Chattanooga area, the cheapest gas Monday was $3.13 a gallon at both the Raceway station at 3450 Amnicola Highway and an Exxon station at 4345 Highway 58.

Rescue Rooter to add 125 Tennessee jobs

American Residential Services will invest $2.75 million to expand its headquarters in Memphis, adding 125 more jobs over the next five years.

The company is privately owned and one of the nation’s largest providers of heating, air conditioning, plumbing and sewer and drain services for homes and businesses. Established in 1975, ARS/Rescue Rooter has built a national portfolio with locations in 24 states.

“ARS has proudly called Memphis home for 25 years.” Scott Boose, CEO of American Residential Services, said in a statement Monday. We are committed to investing in our community, continuing to hire top talent and providing exceptional service to our valued customers.”

UBS pays $1.4 billion to settle mortgage case

UBS will pay U.S. authorities $1.44 billion to settle the last lingering legal case over Wall Street’s role in the housing bubble of the early 2000s, which ultimately led to the 2008 financial crisis and Great Recession.

The Swiss bank agreed to pay a civil penalty over how it handled the sale of 40 mortgage-backed securities issued in 2006 and 2007. The settlement argues UBS bankers gave false and misleading statements about the health of the mortgages in those bonds to the buyers in violation of federal securities law.

For example, UBS bankers knew the underlying mortgages in those bonds were poorly underwritten or violated consumer protection laws. The bonds in question ended up with substantial losses for investors.

With the UBS settlement, the last remaining outstanding legal case from the Great Recession has now come to a close, the Justice Department said. Banks paid collectively more than $36 billion in civil penalties for their conduct related to the mortgage crisis, but that does not include other settlements banks have made to state and local authorities as well.

The financial crisis and subsequent recession is still being felt today in many parts of the nation in depressed housing values. It also was a seismic shift politically, leading to the rise of populist candidates both in the U.S. and internationally.

Consumers lower their inflation outlook

U.S. consumers’ near-term inflation expectations declined in July for a fourth month, reaching the lowest level since April 2021, according to a Federal Reserve Bank of New York survey.

Median one-year-ahead inflation expectations fell to 3.5% last month from 3.8% in June, the New York Fed said Monday. Expectations for what inflation will be at the three-year and five-year horizons each ticked down to 2.9%, from 3%.

The improvement in the short-term inflation outlook was “broad based” across demographic groups, and consumers said they expect smaller price increases for essential living expenses such as food, medical care and rent, over the next year — all of which saw expectations fall to the lowest levels since at least early 2021.

Households are also feeling more optimistic about their finances and the labor market, the survey found. Respondents reported reduced fears of losing their jobs and lower perceived probabilities that the U.S. unemployment rate will be higher a year from now.

— Compiled by Dave Flessner