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Sales of US existing homes slip slightly in August

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By Francesca Hangeior

Sales of previously owned US homes fell in August, according to industry data released Thursday, but lower mortgage rates and growing supply were likely to boost the industry.

Existing home sales dropped 2.5 percent last month from July to an annual rate of 3.86 million, seasonally adjusted, said the National Association of Realtors (NAR).

This was largely in line with the 3.90 million consensus that analysts expected.

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“Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months,” said NAR chief economist Lawrence Yun.

Homebuyers in the United States have been grappling with a sharp rise in mortgage rates after the US central bank rapidly lifted the benchmark lending rate in 2022 to tackle inflation.

But with growing expectations that the Federal Reserve was going to pivot to rate cuts after holding rates at a decades-high level for months, mortgage rates have also shifted lower.

The popular 30-year fixed-rate mortgage averaged 6.2 percent as of September 12, according to mortgage finance firm Freddie Mac — reaching the lowest level since February 2023.

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A year ago, the rate was around 7.2 percent.

On Wednesday, the Fed kicked off a process of easing monetary policy with a bold half-percentage-point rate reduction, adding to expectations that mortgage rates would fall further.

“Existing home sales fell to a 10-month low in August, but forward looking indicators like mortgage applications point to a pickup in sales in September and October,” said economist Nancy Vanden Houten of Oxford Economics.

But Oliver Allen of Pantheon Macroeconomics cautioned that a mortgage rate of six percent remains “well above the average rate of about four percent on the stock of existing mortgages.”

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“So moving home and taking out a new mortgage still requires a prohibitive jump in monthly payments for most current homeowners,” he said in a note.

“As such, a constrained supply of existing homes for sale will continue to hold back sales,” Allen added.

Compared with a year ago, NAR data showed that existing home sales were 4.2 percent down in August.

The median price increased 3.1 percent from August 2023 to $416,700, with all four US regions seeing price jumps.

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Yun told a media call on Thursday that although home sales are struggling, home prices remained high.

Foreign

Trump to suspend US gas tax as Iran war raises prices

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US President Donald Trump said on Monday that he plans to suspend a federal gasoline tax as consumers deal with surging energy prices in the wake of the Iran war.

Responding to a reporter’s question at the White House, Trump said he would be taking the step, with the suspension to remain in place “till it’s appropriate.”

“It’s a small percentage, but you know it’s still money,” he said.

US federal taxes on gasoline amount to 18.4 cents per gallon on gasoline and 24.4 cents per gallon for diesel, according to the US Energy Information Administration (EIA).

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Suspending the tax would require an act of Congress, where Trump’s Republican party holds a razor-thin majority in both houses.

Trump ally Senator Josh Hawley said he would introduce legislation to do so on Monday. In the House, Republican Anna Paulina Luna made a similar pledge to introduce a bill “this week.”

US fuel prices have skyrocketed since Trump launched the war on Iran, with gasoline and diesel both up about 50 percent since late February.

Iran’s retaliatory action has included virtually closing the key Strait of Hormuz, through which about a fifth of the world’s oil and natural gas passes.

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On Monday, the average price of a gallon of regular gasoline in the United States was $4.52, with diesel at $5.64, according to the AAA motor club.

Suspending the federal fuel tax would bring those prices down by about four percent.

State taxes on fuel, which average 32.61 cents per gallon for gasoline and 34.76 cents for diesel according to the EIA, would be unaffected by the move.

AFP

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Iran responds to US peace proposal as drones hit Gulf

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Iran responded to Washington’s latest peace proposal on Sunday, after drones threatened several Gulf region targets and Tehran warned it would not hold back from retaliating against any new US strikes.

The long-awaited answer came as Israeli Prime Minister Benjamin Netanyahu — whose forces launched the war on Iran in tandem with the US on February 28 — insisted the conflict wasn’t over until Iran’s enriched uranium was removed and its nuclear facilities dismantled.

But Tehran maintained its defiant line, even as behind-the-scenes diplomacy towards a deal continued.

“We will never bow down to the enemy, and if there is talk of dialogue or negotiation, it does not mean surrender or retreat,” Iranian President Masoud Pezeshkian said on X Sunday.

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According to state broadcaster IRIB, Tehran’s response to the US plan, passed to Pakistani mediators, focuses on ending the war “on all fronts, especially Lebanon” — where Israel has kept up its fight with Iran-backed Hezbollah — as well as on “ensuring shipping security”.

It offered little in the way of detail, though the US proposal had reportedly focused on extending the truce in the Gulf to allow for talks on a final settlement of the conflict and on Iran’s contested nuclear programme.

Netanyahu said on Sunday that Iran’s stockpile of enriched uranium must be removed before the US-Israeli war against Iran could be considered finished.

“It’s not over, because there’s still nuclear material — enriched uranium — that has to be taken out of Iran. There’s still enrichment sites that have to be dismantled,” Netanyahu told CBS’s “60 Minutes”.

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– No Hormuz ‘interference’ –

Iran imposed a blockade on the vital Strait of Hormuz early in the war, sending global oil prices soaring and rattling financial markets.

It has since set up a payment mechanism to extract tolls from shipping crossing the strait, but US officials have stressed it would be “unacceptable” for Tehran to control an international waterway and the route for a fifth of the world’s oil.

The US Navy, meanwhile, is blockading Iran’s ports, at times disabling or diverting ships heading to and from them.

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Britain and France are leading efforts to create an international coalition to secure the strait after a peace deal is secured, with both countries sending vessels to the region in advance.

But Iran insisted on Sunday that they would meet “a decisive and immediate response” should they deploy their ships to the strait.

“Only the Islamic Republic of Iran can establish security in this strait and it will not allow any country to interfere in such matters,” Deputy Foreign Minister Kazem Gharibabadi posted on X.

French President Emmanuel Macron later insisted that his country had “never envisaged” a naval deployment in the Strait of Hormuz, but rather a security mission “coordinated with Iran”.

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Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, meanwhile, “stressed that freedom of navigation is a firmly established principle that is not open to compromise, and that closing the Strait of Hormuz or using it as a pressure card only serves to deepen the crisis”.

– ‘Restraint over’ –

Fresh drone attacks in the Gulf on Sunday were the latest to rattle the ceasefire after a string of flare-ups in recent days.

The United Arab Emirates said its “air defence systems successfully engaged two UAVs launched from Iran” in what would be, if confirmed, only the second strike on a Gulf country since the start of the month-old truce.

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Iran’s neighbour Kuwait reported an attempted attack as well.

“At dawn today, the armed forces detected a number of hostile drones in Kuwaiti airspace, which were dealt with in accordance with established procedures,” the military posted.

And Qatar’s defence ministry said a freighter arriving in its waters from Abu Dhabi was hit by a drone off the port of Mesaieed.

The United Kingdom Maritime Trade Operations centre said the bulk carrier reported being struck by an unknown projectile.

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“There was a small fire that has been extinguished, there are no casualties. There is no reported environmental impact,” it said.

There was no immediate claim of responsibility, but Iran’s Fars news agency reported that “the bulk carrier that was struck near the coast of Qatar was sailing under a US flag and belonged to the United States”.

In a social media post on Sunday, the spokesman for the Iranian parliament’s national security commission warned the United States: “Our restraint is over as of today.”

“Any attack on our vessels will trigger a strong and decisive Iranian response against American ships and bases,” Ebrahim Rezaei said.

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Iran’s Revolutionary Guards had threatened the day before to target US interests in the Middle East if its tankers came under fire — as they did on Friday when a US fighter jet fired on and disabled two Iran-flagged vessels in the Gulf of Oman.

Tehran’s military chief Ali Abdollahi also met the country’s supreme leader Mojtaba Khamenei and received “new directives and guidance for the continuation of operations to confront the enemy”, according to Iranian state television.

AFP

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Georgia Mayor Fires Entire Police Force For Upsetting His Wife

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The mayor of a small Georgia town has fired his entire police force for upsetting his wife.

Cohutta Mayor Ron Shinnick shut down the Cohutta Police Department and fired all 10 of its employees earlier this week after officers allegedly made “inappropriate comments” about his spouse on Facebook, WDEF reported.

“The PD has been dissolved, and all personnel have been terminated,” read a brutal sign on the department’s door first thing Wednesday.

“They’ll get a paycheck. We’re not that way, and I appreciate their service, okay? It is time for a change,” Shinnick said bluntly when asked about the controversy.

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According to the New York Post, tensions boiled over late last month after several officers filed formal complaints alleging that the town’s former clerk, Pam Shinnick who is also the mayor’s wife continued working for the town despite being fired.

She was terminated last year for apparently creating a “hostile work environment” in the town of less than 1,000 people — but allegedly still had access to personal and classified information.

In the wake of the formal complaints, the mayor held a joint press conference with Police Chief Greg Fowler and town attorney Brian Rayburn to say they’d managed to resolve the dispute through “open dialogue and good-faith mediation.”

But roughly a week later, the cops were all fired anyway.

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“This all comes to personal vendetta from the mayor and I wholeheartedly believe that,” said one of the axed officers, Sgt. Jeremy May, adding that they’d been assured their jobs weren’t in jeopardy for lodging complaints about the mayor’s wife.

“Official response from the town attorney: Nobody’s jobs are in jeopardy,” May said. “Here we are, less than a week later, nobody has a job.”

“We took a stand for transparency, and in result, every one of them has lost their jobs,” he added.

The mayor, for his part, blamed the conflict on “inappropriate comments” posted on Facebook by the officers.

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For now, the fired officers have been ordered to return all department equipment.

The Whitfield County Sheriff’s Office is set to take over policing for the small town.

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