Buying a Home Remains Out of Reach

Buying a Home Remains Out of Reach By Hardika Singh

High home prices and borrowing costs continue to constrain buyers and sellers. Meanwhile, business activity in the U.S. is chugging along, while Europe logs a slowdown, data released Friday signals. And the Internal Revenue Service plans to maintain a moratorium on processing claims filed since mid-September 2023 for a popular pandemic-era tax credit. Read on for this news and more.

Top News Home Prices Hit a Record High

Home prices rose in May to a new high, with low inventory continuing to spur bidding wars among home buyers in some markets. Even though demand is low, home prices are still rising because high mortgage rates are deterring potential sellers from listing their homes, keeping the supply of homes on the market lower than normal.

Pro Take: The Covid Retirement Wave Could Be With Us for Good

Federal Reserve Chair Jerome Powell has repeatedly pointed to the strong recovery in labor-force participation as a big reason why wage growth is slowing, easing pressure on inflation.

But the labor force today looks different in one crucial point than it did before the pandemic: Workers have no interest in working into their 60s or 70s. Read more .

U.S. Economy U.S. Business Activity Grows as Europe Recovery Slows

Business activity in the U.S. continued to grow rapidly this month, according to surveys of purchasing managers released Friday, but there were signs of a surprise slowdown in Europe as political uncertainty disrupted the flow of new orders.

Financial Regulation IRS to Reject Billions of Dollars in Covid Employer Tax-Credit Claims

The Internal Revenue Service is planning to deny billions of dollars of what it says are improper claims for a popular pandemic-era tax credit, while starting to gradually pay out some claims that have been sitting at the tax agency for more than nine months.

Forward Guidance Monday (all times ET)

2 p.m.: Fed Bank of San Francisco President Mary Daly delivers remarks

Tuesday

8:30 a.m.: Canada consumer price index

9 a.m.: S&P CoreLogic Case-Shiller Indices

10 a.m.: Consumer confidence

12 p.m.: Economic Club of New York event with Fed Governor Lisa Cook

Research BOE Might Have to Provide Additional Liquidity Sources as Demand Rises

The Bank of England might have to provide new sources of liquidity in addition to the short-term repo facility and long-term repo facility due to rising demand for liquidity as the BOE conducts quantitative tightening, Deutsche Bank Research senior economist Sanjay Raja says in a note. The BOE's balance sheet reductions through gilt sales and gilt redemptions have resulted in reduced liquidity and increased demand for its short-term funding. "The BOE may need to do a little more work - particularly given the recent [liability-driven investment] crisis - to ensure that any funding distortions can be contained through established facilities," Deutsche Bank says. - Miriam Mukuru

Basis Points America is cruising into an uncharted sea of federal debt, with a public seemingly untroubled by the stark numbers and a government seemingly incapable of turning them around. History, however, offers some cautionary notes about the consequences of swimming in debt. Over the centuries and across the globe, nations and empires that blithely piled up debt have, sooner or later, met unhappy ends. - Gerald F. Seib Rising healthcare prices have long eroded American wages. They are doing that by eating into jobs . Companies shed workers in the year after local hospitals raise their prices, new research found. Higher hospital prices pushed up premiums for employees' health insurance, which businesses help pay for. - Melanie Evans, Andrew Mollica and Josh Ulick Gaming credit-card rewards has long been a favorite American pastime. It's now possible to earn points for your rent, tuition, taxes and other big bills. Landlords and other vendors are shifting away from paper checks and toward the internet, where payment options include credit cards. That doesn't mean it's a good deal. - Katherine Hamilton America and Europe are heading down different roads in response to China's emergence as an electric-vehicle juggernaut. The U.S. is closing its borders to Chinese EVs before they even launch. The Biden administration last month raised the total tariff rate to 102.5% on Chinese EVs, despite extremely low imports. Meanwhile in the European Union, additional tariffs announced by Brussels this month will only slow the influx of Chinese EVs. - Stephen Wilmot The first China shock that devastated manufacturing in the U.S. in the early 2000s bypassed large parts of Europe. A second shock now under way looks much more threatening. But rather than simply erect ever higher barriers to the flood of Chinese imports, as the U.S. has done, European leaders are seeking an alternative: rolling out a welcome mat . - Tom Fairless and Bertrand Benoit China's foreign direct investment fell further in May , extending a streak of declines for the 12th straight month, official data showed. China attracted 412.51 billion yuan ($56.81 billion) worth of foreign direct investment in the January to May period, down 28.2% from the same period last year, the Ministry of Commerce said late Friday. - Singapore Editors Sentiment at German companies has become more pessimistic on weakening expectations for business conditions ahead, according to a monthly survey. The Ifo Institute's business-climate index fell to 88.6 in June, from 89.3 in May, data showed Monday. - Ed Frankl Canadian shoppers once again cut back on spending in May following a rebound the month before, a sign of the stress household budgets continue to face with interest rates still high. An advance estimate of retail receipts indicates sales retreated 0.6% from the month before in May, Statistics Canada said Friday. - Robb M. Stewart About Us

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Hardika Singh in New York. Send your tips, suggestions and feedback to [[e-mail]].

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

06-24-24 0715ET