U.S. Spring Home Selling Season Is Off to a Rough Start

Jessica Mendoza (0:00)

Hey, this is Jessica Mendoza, host of The Journal Podcast, our show about money, business, and power. If you're looking for more deeply reported stories like we share every day, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com/thejournal, all lowercase, to subscribe now.

Alex Ossola (0:23)

The US blockade of the Strait of Hormuz goes into effect, sending global oil markets spinning once again. Plus, the spring home selling season is off to a rough start.

Nicole Friedman (0:33)

Given that the March numbers weren't very good, it's really not a good sign for what we can expect in April and even into May. So this is a pretty bad sign for the rest of the year because spring is such an important time in the housing market.

Alex Ossola (0:47)

And Goldman reports a record quarter in banking and trading, but investors are worried about the future. It's Monday, April 13th. I'm Alex Ossola for the Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

As we mentioned on this morning's show, President Trump said the US would blockade the Strait of Hormuz after diplomatic talks with Iran fell apart over the weekend. Well, this US effort to stop traffic getting to and from Iranian ports is now in effect as of this morning, as the president told reporters at the White House today.

Robbie Whalen (1:26)

Has the blockade started, sir?

Donald Trump (1:27)

Yeah, it started at 10 o'clock.

Alex Ossola (1:30)

WSJ senior video and national security correspondent Shelby Holliday is here to tell us how the US is enforcing the blockade. Okay, Shelby, how does this blockade actually work?

Shelby Holliday (1:40)

The idea, according to a release by US Central Command, is that the US is going to stop any ships that are going to or from Iranian ports. So this is not necessarily about the Strait of Hormuz. This is about causing economic pain to Iran and preventing Iran from trading with the rest of the world on the water. The US has more than 15 warships in the region to support this blockade, which is a huge naval presence.

And it gives a lot of options in terms of going after ships that try to enter or leave Iranian ports. You have an aircraft carrier, the USS Abraham Lincoln. That has a huge flight deck, so it could very easily be used as a base of operations if the US is planning to board oil tankers, for example. And then you also have guided missile destroyers. Those can also support boarding operations. They have a small flight deck. But they can also be used to influence the movement of commercial ships and marshal them into certain areas. So the idea would be to create a quarantine box and then escort those commercial ships that are violating the blockade into a specific region.

Alex Ossola (2:42)

How does the administration expect Iran to respond to this? Why are they putting this into place now?

Shelby Holliday (2:48)

The US is using this as leverage after talks fell apart in Pakistan. And the hope is that this creates economic pressure and we could potentially see another round of talks in the next few days if this brings Iran to the negotiating table.

Alex Ossola (3:03)

We've been hearing so much about this trait because of its importance to the global oil market. Does the US blockade mean non-Iranian oil can actually move through then?

Shelby Holliday (3:12)

The US would love for non-Iranian oil to move through the strait. Right now that's very difficult because Iran has said that it mined the strait. And so a lot of the experts and former Navy officials I've been talking to say this blockade does two things. It causes economic pain for Iran, but it also gives the US some space to try to clear the mines that Iran has supposedly laid.

Alex Ossola (3:33)

Does this blockade come with risks to the US?

Shelby Holliday (3:35)

There's always a risk that Iran could try to fire drones or missiles at US ships or even at oil tankers. And any Iranian threat freezes traffic. So the US wants ships to start moving through the Strait of Hormuz again and to get all that oil out of the Gulf. So any sort of Iranian retaliation further paralyzes that traffic. And there's also the risk that Iran tries to attack the ports of its neighboring countries. It's already threatened to do so. There are definitely concerns that the US would have to police the waterway indefinitely. There's no timeline attached to this.

Alex Ossola (4:07)

Right. In fact, a reporter asked President Trump about this today.