Tags: Housing | doldrums | prices | rates

Housing Market Enters Doldrums Amid Higher Prices, Rates

By    |   Wednesday, 16 April 2014 01:53 PM

The housing market has hit the skids, after its two-year boom sent home prices soaring and concern about the Federal Reserve tapering its bond purchases pushed mortgage rates higher.

Existing home sales fell 0.4 percent in February to a 4.6 million annual rate, the lowest level since July 2012, according to the National Association of Realtors.

New home sales slid 3.3 percent to a 440,000 annualized rate, the lowest level in five months, according to the Commerce Department.

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Open houses are drawing less attendees. Credit Suisse's index of home-buyer traffic dropped to 42 in March from 66 a year earlier.

These numbers come as home prices soared 13.2 percent in the year through January, according to the S&P/Case-Shiller price index for 20 cities. And the 30-year fixed mortgage rate averaged 4.34 percent in March, up from 3.57 percent a year earlier.

Many housing experts anticipated a recovery in the market after the severe winter weather ended. But now they're not so sure.

"Overall, even after adjusting for weather, it has been worse than what most people expected," Tom Lawler, an independent housing economist, told The Wall Street Journal.

To be sure, while star housing analyst Ivy Zelman of Zelman & Associates expects a 5 percent decrease in existing home sales this year, she expects a 17 percent gain in new home sales.

Overall, "we're bullish still" on the housing market, she told The Journal.

Some others are bullish too. "There’s a big upside to new-home sales," Robert Dye, chief economist at Comerica, told Bloomberg. "We have a huge amount of pent-up demand and very tight inventories."

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The housing market has hit the skids, after its two-year boom sent home prices soaring and concern about the Federal Reserve tapering its bond purchases pushed mortgage rates higher.
Housing, doldrums, prices, rates
286
2014-53-16
Wednesday, 16 April 2014 01:53 PM
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