Spring Home Sales Could Weaken

Laura Kusisto reported earlier this week at The Wall Street Journal Online that, “The economy is booming, take-home pay is rising and millennials are getting married and having children. Despite all those homebuying catalysts, real-estate agents said this could be one of the weakest spring selling seasons in recent years.

“The culprits: rising mortgage rates, a new tax law that reduces the incentives for homeownership and a growing weariness among first-time buyers being priced out of the market—all of which are expected to damp demand for homes this year.

The next few months are a critical test of the housing market, as buyers look to get into contract before summer vacations and the new school year. About 40% of the year’s sales take place from March through June, according to the National Association of Realtors.”

The Journal article noted that, “Consumer confidence in the housing market fell in February, according to data released Wednesday by mortgage company Fannie Mae . The share of respondents who said now is a good time to buy a home decreased 5 percentage points from January, due to concerns about stock market volatility and rising mortgage rates.

“In January, existing home sales suffered their sharpest annual drop in three years, falling 4.8% from a year earlier to a seasonally adjusted annual rate of 5.38 million, according to the National Association of Realtors.”

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