Peak Existing Homes

The U.S. housing market has witnessed the peak of existing-home sales, and experts no longer anticipate that they will contribute to the economy's growth.

Economists at Bank of America Merrill Lynch say that sales of existing homes account for 90 percent of all transactions in the nation. Michelle Meyer leads the team of experts, saying in a research note, "The peak in existing home sales can largely be explained by the decline in affordability," and adding that home prices this cycle were close to peak prices in the last bubble, while the Federal Reserve will be increasing its benchmark interest rate this week, Business Insider reports.

Meyer also said homeowners were cutting prices more aggressively to attract buyers. For example, the real-estate company Zillow is seeing the most price reductions since 2013. And during the week after Labor Day, sellers in New York City made the biggest cuts to their asking prices since 2009, according to StreetEasy. "The outcome is that the housing market is no longer a tailwind for the economy but has yet to become a headwind," Meyer said. "Call it neutral."

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