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U.S. home prices rose by record amount in July amid limited supply

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U.S. home prices rise by record amount

U.S. home prices soared in July by a record amount from a year earlier as buyers desperate for homes bid up prices amid a limited supply.

The S&P CoreLogic Case-Shiller 20-city home price index surged 19.9 percent in July compared with a year ago, the largest gain on records dating back to 2000. In 17 of the 20 cities, prices rose more quickly in July than in June. And prices reached all-time highs in 19 of 20 cities. The one exception was Chicago, where prices are just 0.3 percent below their 2006 peak.

Sales of new and existing homes have jumped this year, driven by low mortgage rates and a desire for more living space during the pandemic. Sales of existing homes are up 16 percent in the first eight months of 2021 compared with last year, and they’re up 12 percent from the same period in 2019.

Phoenix, San Diego and Seattle reported the biggest price increases, with Phoenix leading the nation for the 26th straight month.

The rising prices are making it harder for younger would-be buyers to purchase a home, with the proportion of sales going to first-time home buyers falling to 29 percent last month, the lowest since January 2019, according to the National Association of Realtors. Meanwhile, investors snapped up 15 percent of homes in August, up slightly from a year earlier.

There were just 1.29 million homes for sale in August, according to the NAR. That’s down nearly one-third from a year earlier.

— Associated Press

Mastercard eases path to installment plans

Mastercard will make it easier for banks to offer installment plans as consumers flock to options for paying off purchases over time. 

Such buy-now, pay-later options have grown in popularity in recent years, especially among younger consumers. With Mastercard’s new push, lenders will be able to approve consumers for an installment loan before a purchase or offer the option during checkout, the company said Tuesday. 

As part of the new program, Mastercard will allow lenders to use consumers’ banking data — information it has access to after purchasing the data aggregation company Finicity last year — in their underwriting decisions. 

“They can see all my transactions, my debits, my credits, when I’m getting deposits, they can see my paycheck coming in, they can see my outflows,” Craig Vosburg, Mastercard’s chief product officer, said in an interview with Bloomberg Quicktake. “That’s much richer information to underwrite a loan than just a simple credit score.”

Financial-technology companies focused on the buy-now, pay-later space have already diverted as much as $10 billion in annual revenue away from banks, according to McKinsey & Co. For merchants, buy-now, pay-later services increase average sales by 45 percent and reduce the risk that consumers will abandon their shopping carts before they finish checking out online, Mastercard said.

— Bloomberg News

Oil demand will grow sharply in the next few years as economies recover from the pandemic, OPEC forecast on Tuesday, adding that the world needs to keep investing in production to avert a crunch despite an energy transition. This contrasts with views such as those in an International Energy Agency report in May, which said the world should not fund new oil projects if it is to hit net zero emissions.

American Airlines announced a code-sharing agreement with India's largest airline, IndiGo, on Tuesday, with the U.S. airline gearing up to launch new flights between the two countries. Under the agreement, which is expected to begin in October, American's "code" will be on 29 of IndiGo's domestic routes in India. Code-sharing allows an airline to sell seats on a flight operated by its partner.

A mistaken $24 million in crypto transaction fees is being returned, according to an exchange involved in the issue. Decentralized exchange DeversiFi, which had earlier called the price tag "erroneously high," expressed gratitude that the recipient was willing to cooperate. While fat-finger errors can spark sharp swings in traditional markets, they are uniquely problematic in the crypto world, since blockchain transactions are supposedly irreversible.

— From news services