Tags: Hovnanian | housing | market | weather

Hovnanian: Housing Market Weakness Stems From More Than Just Weather

By    |   Tuesday, 11 March 2014 11:32 AM

The slowdown of the housing market in recent months resulted from more than the just the weather, says, Ara Hovnanian, CEO of Hovnanian Enterprises.

He notes that weakness began creeping into the market last year. "And that was before the weather," Hovnanian tells CNBC.

"The mortgage rate increase combined with housing [price] increases this past year in the good market, . . . [is] causing some buyers to hold back a little bit and hesitate [on] a little sticker shock," he notes.

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"But they haven't really changed their house-buying patterns in terms of what size and what price." Hovnanian contends sales have improved in recent weeks.

The S&P/Case-Shiller index of home prices in 20 cities rose 13.4 percent in the year through December, decelerating from the 13.7 percent gain in the year through November.

Meanwhile, existing home sales fell 5.1 percent in January to a 4.62 million annual rate, the lowest since July 2012.

"But I have no doubt that we are going to recover," Hovnanian states. "We're still way below demographically supportable housing production levels. And I think it's going to come back."

After the existing home sales data, Robert Rosener, an economist at Credit Agricole, expressed optimism for a rebound too.

"The weather played some role, but just as much of a role was played by lower inventories, higher mortgage rates, slightly higher prices and tighter credit," he tells Bloomberg. "We're on a positive trajectory, and when the spring comes we should see a bounce back."

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The slowdown of the housing market in recent months resulted from more than the just the weather, says, Ara Hovnanian, CEO of Hovnanian Enterprises.
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Tuesday, 11 March 2014 11:32 AM
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