Changes in the overall direction of the housing market are akin to a large ship making course corrections - it takes some time for the driving factors to materialize as a change in the sales level. In many recent transactions we're looking at a delayed effect of mortgage interest rates that peaked in November but are now lower than expected. Mortgage applications have trended up in recent weeks, so we shouldn't be surprised to see pending home sales rise in the next couple months.
More Quotes from David Lereah:
Although interest rates are rising modestly, an improving job market is creating a favorable backdrop for home sales, but at a somewhat slower pace in the months ahead.David Lereah
At first glance, this level of activity doesn't seem sustainable, but strong market fundamentals and good weather have given us some unusually strong levels of existing-home sales.
David Lereah
In examining the hottest markets for home-price appreciation, we see a rolling boom moving from one metro area to another over time, as well as a spillover effect into nearby areas with lower home prices, ... That is spreading the wealth of housing returns, with a natural ease of appreciation in areas following a period of extraordinary price growth.
David Lereah
Part of what we're seeing now is 'fence-jumping' from people wanting to buy a home before interest rates move higher. Even with an additional rise in recent weeks, the good news is that mortgage interest rates now appear to be leveling out in the 6.3 percent range.
David Lereah
Our in-house tracking of major brokers across the country shows sales activity making some recovery, ... which demonstrates that the underlying demand and fundamentals of the market remain strong.
David Lereah
I worry about a budget deficit more than anything else, ... If the Bush administration continues to cut taxes and build up military, it will result in a higher budget deficit, which will lead to higher interest rates.
David Lereah
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