U.S. Outlook: Is the housing recovery back on track?

Scott Anderson
Posted by Scott Anderson
Chief Economist

Recent October data suggests home sales bounced back from a summer swoon, but other factors are showing signs of weakness.

homeprices_rise_cropBelow is a brief summary of my weekly analysis, followed by a link to the full U.S. Outlook report, delivered on Dec. 6, 2013.

Key observations:
  • 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.

Click here to read my full report.


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