Sales of Existing U.S. Homes Fall as Affordability Drops

[Purveyor]

Source: Bloomberg

By Lorraine Woellert - Oct 21, 2013

Purchases of previously owned U.S. homes fell in September for the first time in three months, retreating from an almost four-year high as rising prices and mortgage rates discouraged would-be buyers.

Sales dropped 1.9 percent to a 5.29 million annual rate, the National Association of Realtors reported today in Washington. The median forecast of 67 economists in a Bloomberg survey called for the pace to slow to 5.3 million. Prices climbed 11.7 percent, pushing affordability to an almost five-year low, the group said.

Higher borrowing costs will probably hold back demand, slowing the housing rebound that’s been a source of strength for the expansion. At the same time, the damage done to fourth-quarter growth by the partial government shutdown raises the odds that the Federal Reserve will delay cutting back on bond purchases, which means interest rates may stabilize around current levels.

“We see a little bit of a bumpy ride,” said Kevin Cummins, an economist at UBS Securities LLC in Stamford, Connecticut, who correctly projected the drop in sales. “The jury is still out on home sale and how much of a pullback we might see due to higher mortgage rates.”

Read more: http://www.bloomberg.com/news/2013-10-21/sales-of-existing-u-s-homes-decrease-as-affordability-declines.html

[longship]

1. "Affordability Drops" -- gotta love the twisted rhetoric.

What they really mean is prices increased and people's income decreased.

[jtuck004]

2. It's a downhill rollercoaster, not a "bumpy ride"...

http://www.doctorhousingbubble.com/gen-renter-generation-of-renters-demographics-of-housing-age/

And this is with 48 million more people than we had in 1995:

[BlueJazz]

3. I was talking about this very subject the other day with a guy.

He: Housing is doing pretty good

Me: Not for long

What do you mean?

Prices are getting too high

Naw...no way

Oh Yes...Who going to buy them, James?...The WAGES are staying the same or going down and land taxes are going up. It's going to turn into another bunch of bullshit just like it was a few years ago.

I don't know.

I know...we're screwed again.