AFP

The median US home price broke above $400,000 for the first time, sending existing home sales in May falling for the fourth straight month, according to industry data released Tuesday.

Sales toppled 3.4 percent compared to April as the median sales price hit $407,600, a 14.8 percent surge compared to a year ago, the National Association of Realtors (NAR) reported.

The sales pace slowed to a seasonally adjusted annual rate of 5.41 million last month, which was 8.6 percent lower than May 2021, the report said.

“Home sales have essentially returned to the levels seen in 2019 — prior to the pandemic — after two years of gangbuster performance,” said NAR Chief Economist Lawrence Yun.

“Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year,” he said.

Home loan rates jumped to 5.23 percent in May for a 30-year, fixed-rate mortgage, from 4.98 percent in April, according to Freddie Mac, as the Federal Reserve cranks up the benchmark borrowing rate to tamp down surging inflation.

The sales slowdown caused the inventory of homes on the market to jump 12.6 percent to a 2.6-month supply — just above the level of May 2021, according to the report.

Bargain borrowing rates had helped fuel the strong demand for home buying during the pandemic, driving prices ever higher as builders have struggled to keep up due to supply backlogs for lumber and other materials and a shortage of workers.

Now, “the market is adjusting, rapidly and painfully, to the surge in mortgage rates, which has pushed up the monthly payment on a median home by more than 50 percent since last August,” said Ian Shepherdson of Pantheon Macroeconomics.

He said prices normally would not begin to fall until inventories grew to a seven-month supply, but “the speed of the dislocation in the market in recent months, thanks to the suddenness of the spike in rates, means that a period of falling prices is a good bet.”

Sales fell throughout the United States, except in the Northeast, while prices rose nationwide.

All-cash buyers accounted for a quarter of sales in May, NAR said.

Yun noted trends in condominium sales may indicate that “the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions.”

Iconic breakfast food brand Kellogg became the latest US corporate giant to announce a breakup, unveiling plans Tuesday to split into three companies in a move that lifted its share price.

The company — known for such ubiquitous brands as Corn Flakes and Pop-Tarts — will spin off its North American cereal business into a new company, while a second venture will house Kellogg’s plant-based businesses.

The remaining corporation will be positioned as a higher-growth snacks business with exposure to emerging markets. This unit — which will also house the international cereal operation — accounted for roughly 80 percent of Kellogg’s $14.1 billion in 2021 revenues.

“This will unlock and create opportunity for all three businesses,” Kellogg Chief Executive Steve Cahillane said on a conference call with analysts.

The yet-to-be-named entities will initially be known as Global Snacking Co., North America Cereal Co., and Plant Co. The latter two will be created through tax-free spin-offs.

North American Cereal, covering the United States, Canada and the Caribbean, “will be solely dedicated to winning cereal and will not have to compete for resources with a fast-growing snack business,” said Cahillane, who will lead the new snacks company. 

North American Cereal and Plant Co. would remain headquartered in Battle Creek, Michigan, while Global Snacking will have dual headquarters — in Battle Creek and Chicago.

Leadership for the other two ventures has not yet been announced.

Kellogg’s announcement comes on the heels of earlier corporate break-ups including General Electric’s November 2021 announcement of a split into three ventures, which was followed a few weeks later and by Johnson & Johnson saying it will break in two.

– Growth markets –

The company’s origins date to 1894 when WK Kellogg created Corn Flakes breakfast cereal, launching the Kellogg company 12 years later in Battle Creek, Michigan. 

Subsequent products included Rice Krispies, released in 1928, and Frosted Flakes, which was unveiled in 1952 with the Tony the Tiger character on the box, which became famous for his “They’re gr-r-reat!” tagline.

But the bulk of the company’s revenues now come from global snacks, where about 50 percent of sales come from emerging markets and developed international markets.

Snack brands include Pringles, Pop-Tarts and Rice Krispies Treats, while the group also houses Eggo and other frozen breakfasts and products such as noodles in Africa, which Kellogg described as a “rapidly expanding business.”

Kellogg is aiming to complete the split by late 2023, subject to approval by US regulators.

Kellogg will continue to report as one company throughout 2022, said Chief Financial Officer Amit Banati.

The company expects to produce the required three years of audited financial statements for each of the ventures in the second half 2023.

Cahillane said it will be “business as usual over the next 18 months” while the company moves through the process.

He said Plant Co., which will house the MorningStar Farms alternative meat products, could also be acquired by another company if such an option arises and is better than an initial public offering.

Shares rose 2.9 percent to $69.60 in morning trading.

Lawmakers investigating the January 2021 assault on the US Capitol are due to focus at a hearing Tuesday on the pressure that former president Donald Trump mounted on state officials to overturn the 2020 election.

The presentation launches a third week of summer hearings in which the panel has set out its initial findings that Trump led a multi-pronged conspiracy to overturn the 2020 presidential election, culminating in the insurrection in Washington.

Committee aides say they have evidence that Trump and his allies were personally involved in pushing Republican-controlled legislatures to flip the results in several swing states, away from Joe Biden and into Trump’s column. 

The panel will hear from several top Republican state officials who found themselves cajoled by the Trump campaign to thwart the will of millions of voters based on bogus claims of election fraud.

“Donald Trump knew that there was no widespread fraud — he knew that those claims were baseless, he knew that the numbers simply weren’t there to potentially overturn the election — and he continued to drive these campaigns anyway,” a committee aide said. 

“He knew they were false and it became increasingly clear that this pressure campaign could lead to violence, and he continued to do it anyway.”

– ‘Fake electors’ –

US presidents are not elected directly by citizens, but chosen by “electors” named to a body called the electoral college.

Each state gets as many electors as it has members of Congress and there are 538 in total.

The parties in each state pick their own slate of potential electors and, in almost every part of America, the winning side in the statewide tally for president gets all the electoral votes for that state.

The committee says a key plank of the plot to subvert the 2020 election was getting pro-Trump Republicans in swing states won by Biden to submit official-looking but fake certificates claiming they were the legitimate electors.

The committee says it will demonstrate that the former president pressed his vice president Mike Pence to accept these “fake electors” when he was overseeing certification of Biden’s victory on January 6, 2021. 

Pence ultimately refused to recognize the pro-Trump slates and the president’s supporters rioted for hours at the Capitol in unprecedented scenes of brutality that led to at least five deaths.

The committee will hear from Georgia secretary of state Brad Raffensperger, whom Trump infamously pushed to “find” enough votes to overcome Biden’s lead in the battleground state in a phone call that is the subject of a state-level criminal probe.

Rusty Bowers, speaker of the Arizona House of Representatives, is expected to testify about pressure to reverse his state’s results from Trump, Trump’s lawyer Rudy Giuliani and Ginni Thomas, the wife of Supreme Court Justice Clarence Thomas. 

– ‘Death threats’ –

The committee has asked to speak with Ginni Thomas, who indicated to a conservative news outlet that she was looking forward to the opportunity to “clear up misconceptions.”

Also appearing in person will be Shaye Moss, a former Georgia election official who processed ballots in 2020.

Trump and Giuliani falsely accused Moss and her mother Ruby Freeman of “rigging” the presidential election count in Georgia with “suitcases” full of ballots for Biden. 

Moss and Freeman — who received death threats after Trump publicly named them — are suing Giuliani in federal court. 

A committee aide said that Moss would detail how “being targeted by the former president has upended her life and that of her mother.”

“They were called professional vote scammers, they were subjected to death threats, intimidation, coercion, forced to go into hiding,” the aide said.

He added that the panel would show that threats to election workers continue and the danger to democracy posed by “lies about the 2020 election and lies about future elections” is ongoing.

Trump continued to rail against the committee “of political thugs who have criminalized justice to a level never seen before in our country” on his social media platform Tuesday, reprising debunked conspiracy theories about voter fraud and spying on his 2016 campaign.

The hearing begins at 1:00 pm (1700 GMT).

Moscow on Tuesday warned Lithuania of “serious” consequences over its restriction of rail traffic to Russia’s Kaliningrad exclave, as Kremlin forces made gains in Ukraine’s strategic Donbas region.

The row over Lithuania, the arrival of sophisticated German weaponry in Ukraine’s arsenal, and an imminent decision on Ukraine’s candidacy to join the EU threaten to further ratchet up tensions between the West and Moscow.

Kremlin troops were meanwhile gaining ground in the Donbas, causing “catastrophic destruction” in Lysychansk, an industrial city at the forefront of recent clashes, the region’s governor said. Ukraine confirmed Russia had taken the frontline village of Toshkivka.

Governor Sergiy Gaiday said “every town and village” in Ukrainian hands in Lugansk region was “under almost non-stop fire”. 

Since being repelled from Kyiv and other parts of Ukraine following its invasion in February, Moscow is focusing its offensive on the strategic Donbas region.

In the eastern town of Sloviansk, which could become a flash point as Russian troops advance from the north, local people were preparing to withstand attacks and the authorities said the community would defend itself.

“We believe they’ll beat the Russian scum,” resident Valentina, 63, said of local Ukrainian forces.

The stakes are high. The town was seized by Russia-backed separatists in 2014 and then retaken by Ukrainian forces after a lengthy siege.

– ‘Serious’ consequences –

Russia’s war of words with EU member Lithuania escalated on Tuesday, with Moscow vowing “serious” consequences over Vilnius’ restrictions on rail traffic to the exclave of Kaliningrad. 

Lithuania says it is simply adhering to EU-wide sanctions on Moscow but Russia countered, accusing Brussels of “escalation”.

Moscow summoned the EU’s ambassador to Russia. Its foreign ministry said Lithuania’s actions “violate the relevant legal and political obligations of the European Union”.

“Russia will certainly respond to such hostile actions,” security council chief Nikolai Patrushev said at a regional security meeting in Kaliningrad, a Russian region bordering Lithuania and Poland.

Ukraine’s Defence Minister Oleksiy Reznikov tweeted that powerful German-made Panzerhaubitze 2000 howizter artillery pieces had joined his country’s forces.

On the ground, the police chief of the Kyiv region said victims of the Russian attempt to seize the capital city continued to be found. So far, the bodies of 1,333 civilians have been discovered and 300 people remain missing.

On the maritime front, Russia’s navy is blockading ports, which Ukraine says is preventing millions of tonnes of grain from being shipped to world markets, contributing to soaring food prices.

Russia said Tuesday it had repelled a Ukrainian attempt to re-take the symbolic Snake Island, a small territory in the Black Sea captured by Russian forces on the first day of the invasion. 

Prior to the war, Ukraine was a major exporter of wheat, corn and sunflower oil. 

With European officials due to gather this week at a summit expected to approve Ukraine’s candidacy to join the EU, Brussels foreign policy chief Josep Borrell called the Russians’ port blockade “a real war crime”.

He said it was happening “while in the rest of the world people are suffering hunger”.

Moscow denies responsibility for the disruption to deliveries and, following Borrell’s comments, blamed the West’s “destructive” position for surging grain prices. 

Growing concerns about a food crisis are “the fault of Western regimes, which act as provokers and destroyers”, said foreign ministry spokeswoman Maria Zakharova.

Ukrainian President Volodymyr Zelensky said Kyiv was engaged in “complex negotiations” to unblock grain exports, although he cautioned that there was no progress as yet. 

In an address to the African Union, Zelensky said the continent was a “hostage” of the conflict, and rising food prices had “already brought (the war) to the homes of millions of African families”.

The EU has pledged an additional 600 million euros ($635 million) to help vulnerable nations weather the food security crisis.

– ‘Significant losses’ –

In addition to Toshkivka, Ukraine said it had lost control of the eastern village of Metyolkine, a settlement adjacent to Severodonetsk, which has been a focus of fighting for weeks and is now largely under Russian control.

A chemical plant in Severodonetsk where hundreds of civilians are said to be sheltering was being shelled constantly, Ukraine warned.

But defence ministry spokesman Oleksandr Motuzyanyk told Ukrainian television that Russian forces had suffered “significant losses in the area of Severodonetsk”.

“They are fighting under the old statutes of the Soviet era. This is a war for territory,” he said.

Three people were injured and seven more missing after Ukrainian forces attacked oil drilling platforms in the Black Sea off the coast of Crimea, which was annexed by Russia in 2014, Crimea’s Moscow-backed leader Sergey Aksyonov said.

It was the first reported strike against offshore energy infrastructure in Crimea since Russia launched its invasion and Russian lawmaker Olga Kovitidi said the complex was still ablaze.

– $100 million medal –

In New York, Dmitry Muratov, the Russian editor-in-chief of the independent newspaper Novaya Gazeta, auctioned off his Nobel Peace Prize gold medal for $103.5 million to benefit children displaced by the war.

It was sold to an as yet unidentified phone bidder.

Muratov won the prize in 2021 alongside journalist Maria Ressa of the Philippines.

With US-Russia tensions soaring, Kremlin spokesman Dmitry Peskov told NBC News that two Americans captured in Ukraine while fighting with Kyiv’s military were “endangering” Russian soldiers and should be “held accountable for those crimes”.

US Attorney General Merrick Garland visited Ukraine on Tuesday to discuss prosecution of individuals involved in war crimes.

Spain said one of its citizens fighting for Ukraine had been killed in the country without giving further detail.

Denmark and Sweden meanwhile became the latest European countries to warn of potential gas supply problems. Their energy agencies issued early warnings, due to uncertainty over hydrocarbon imports from Russia.

Ukraine has called the reasons given for Russia’s reduction of gas supply to European customers “far-fetched” and “illegal”.

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The United States on Tuesday confirmed that a second American was killed fighting for Ukraine, as it warned of risks amid worries over two other US citizens captured battling Russia.

The State Department said that 52-year-old Stephen Zabielski died in Ukraine and that it was providing his family with consular assistance.

“We once again reiterate US citizens should not travel to Ukraine due to the active armed conflict and the singling out of US citizens in Ukraine by Russian government security officials,” a State Department spokesperson said.

The spokesperson called on US citizens in Ukraine to “depart immediately if it is safe to do so using any commercial or other privately available ground transportation options.”

Zabielski is the second American known to be killed fighting for Ukraine since Russia attacked its neighbor in February.

A 22-year-old former Marine, Willy Joseph Cancel, was confirmed as the first American killed fighting for Ukraine in late April.

A newspaper in upstate New York, where Zabielski used to live, ran an obituary saying that he died on May 15 “while fighting the war in Village of Dorozhniank, Ukraine.”

Zabielski, who went by Steve, was employed in construction for 30 years and was survived by a wife and five stepchildren, said the obituary in The Recorder.

“Steve enjoyed life to the fullest. He enjoyed hunting, fishing, & riding his Harley,” it said.

The obituary said that he was born in Amsterdam, New York, near the state capital Albany, and lived in the area until 2018 before moving to Florida.

The death was confirmed amid US concerns about two US military veterans volunteering for Ukraine who were captured earlier this month in the east of the war-wracked country.

Alexander Drueke and Andy Huynh, who had both been living in Alabama, were seen in videos aired by Russian state media but it was unclear where they were being held.

The State Department has said that Russia is required to treat volunteers humanely as they would other prisoners of war in accordance with the Geneva Conventions.

Kremlin spokesman Dmitry Peskov, in an interview with NBC News released on Monday, called them “soldiers of fortune” and said they should be “held responsible for those crimes that they have committed.”

Peskov also said the Geneva Conventions would not apply to the pair.