Is this the end of the real estate boom? At a glance, the figures from the National Association of Realtors might suggest a negative picture. Sales slipped from 4.62 million in January 2014 last month, and fell 7.1 per cent from February 2013 to reach the lowest pace of sales since July 2012.
Prices continue to rise, though, with the average home value rising to 189,000, 9.1 percent higher year-on-year.
“Price gains have translated into an additional $4 trillion of housing wealth recovery over the past three years,” says NAR chief economist Lawtence Yun.
Rising values, though, are helping to weaken demand, with properties become less affordable the more the market recovers. Indeed, according to Freddie Mac, the national average commitment rate for a 30-year fixed-rate mortgage is now 4.30 per cent, significantly higher than 3.53 per cent in February 2013.
Combined with bad weather and limited supply, buyers are now more reluctant to climb the property ladder.
Lawrence Yun, NAR chief economist, adds: “We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago.”
He remains optimistic, though: …read more
Source: The Movechannel