U.S. Outlook: Is the housing recovery back on track?
Recent October data suggests home sales bounced back from a summer swoon, but other factors are showing signs of weakness.
- Strong October new home sales report masks risks to housing recovery.
- Homebuyers and housing market are not immune to rising interest rates.
- New homebuyers appear highly interest-rate sensitive.
- Housing recovery at risk from home-price appreciation and interest rate increases outpacing household income gains.
- Mortgage rates likely to rise about 40 basis points to 4.85% as Fed cuts back QE3 in 2014.
- Rising rates will drive marginal buyers out of the market or into lower-priced homes or condos.
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