Overnight Finance

On The Money — Housing market shows signs of weakness

A for sale sign stands in front of a house
Matt Rourke
In this June 8, 2018, file photo a for sale sign stands in front of a house, in Jenkintown, Pa.

Homebuilder sentiment continues to decline as demand for houses is hurt by high prices and interest rates. We’ll also look at Biden’s upcoming signing of the Inflation Reduction Act, more gas price predictions and the partisan battle over additional IRS funding.

But first, learn more about the spike in FBI threats following the Trump raid.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Aris Folley and Karl Evers-HillstromSubscribe here.

Homebuilder confidence dips for 8th straight month

Record home prices and elevated interest rates caused homebuilder confidence to fall for the eighth straight month in August, according to a new survey. 

The housing market index calculated by the National Association of Home Builders (NAHB) and Wells Fargo dipped six points this month and turned negative for the first time since May 2020. The eight-month streak of declines marks the worst stretch since the 2007 housing market crash.  

  • Nearly 7 in 10 home builders surveyed said that higher interest rates are the driving force behind weaker demand for houses.
  • One in five said they had to reduce prices over the past month to boost sales or prevent cancellations.  

“Tighter monetary policy from the Federal Reserve and persistently elevated construction costs have brought on a housing recession,” NAHB chief economist Robert Dietz said in a statement.  

Karl has more here

SIGNING SOON 

Biden to sign Democrats’ signature economic bill into law this week 

President Biden will sign into law the sweeping climate, health care and tax legislation that has been Democrats’ priority for more than a year during a ceremony at the White House on Tuesday.

The signing will represent a major milestone for Biden and his domestic economic agenda. The prospects of his climate proposal appeared hopeless a month ago but were dramatically revived in an agreement between Senate Majority Leader Charles Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) at the end of July.   

  • The legislation, called the Inflation Reduction Act, passed the House in a party-line vote Friday, about a week after passing the Senate with only Democratic votes through a process known as budget reconciliation. Vice President Harris cast the tie-breaking vote.
  • The legislation contains provisions to lower prescription drug costs, offer clean energy tax credits to Americans and companies, and establish a 15 percent corporate minimum tax and a 1 percent excise tax on stock buybacks.
  • Biden administration officials are preparing to traverse the country to promote the bill in the coming weeks, making the case to voters that Democrats can deliver on their promises in the critical three months before the November midterm elections. 

The Hill’s Morgan Chalfant has the details here

Energy secretary expects gas prices to fall further 

Energy Secretary Jennifer Granholm on Sunday projected an ongoing decline in gas prices to continue but expressed uncertainty given potential changes in global events that would impact supply levels.

In an appearance on CNN’s “State of the Union,” Granholm cited a recent short-term outlook from the Energy Information Administration (EIA) predicting the average price for a gallon of gasoline to dip to $3.78 in the fourth quarter.  

“We hope that that’s true,” she said. “But, again, it can be impacted by what’s happening globally. The president has done more than any president in history to make sure that the price, insofar as he’s got control, continues to decline, and has included asking for increased production both domestically and overseas.”

TAX TUSSLE

GOP under fire for rhetoric over IRS 

Republicans are coming under fire for their rhetoric over $80 billion in funding for the IRS included in a massive climate, tax and health care bill that Democrats in Congress are sending to the White House.    

The funding, over 10 years, is intended to help the IRS enforce various provisions in the Inflation Reduction Act. Of the $80 billion, more than half would go to increased enforcement, like audits.    

  • Republicans have been arguing it amounts to creating a new army of IRS agents to go after taxpayers.
  • But the IRS, Democrats and outside experts all say the new enforcement money will mostly allow the IRS to focus on audits of the wealthy. 

Tobias Burns explains here

Good to Know

Coal country is still reeling from Sen. Joe Manchin’s (D-W.Va.) decision to back a sweeping climate and energy package that will accelerate the nation’s transition away from coal.

In the Mountain State, the once-burgeoning coal industry says it feels betrayed, displaced coal workers are celebrating the bill’s black lung benefits and Republicans seeking Manchin’s seat in 2024 are licking their chops.

Here’s what else we have our eye on: 

  • China announced on Monday it was once again organizing military drills in the waters and airspace around Taiwan after a five-member U.S. delegation landed on the island.
  • Recent U.S. sanctions against cryptocurrency mixer Tornado Cash have sparked a debate within the crypto community on whether the ban compromises users’ ability to operate anonymously.
  • North Dakota voters will decide this fall whether to legalize recreational marijuana, following the official certification of a ballot measure. 

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow. 

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Tags Charles Schumer gas prices housing market Inflation Reduction Act Interest rates irs funding Joe Manchin
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