Why is housing market shaky despite good economy, mortgage rates?

The current adjustment in the housing market differs from other recent slowdowns that were accompanied by high mortgage rates or a bleak economic outlook. New Homes Magazine columnist Don DeBat explores the factors affecting sales and pricing in his May column:

“Looking into 2007, we view this housing cycle adjustment as significantly different than the past two housing cycle adjustments — one from the late 1970s to the early 1980s, another from the late 1980s to the early 1990s,” said marketing expert Ron Peltier, president and CEO of HomeServices of America, Inc., a Berkshire Hathaway affiliate. Mortgage rates averaged 15 percent during that first adjustment period and 10 percent during the second.

“Past real estate slowdowns were economically driven,” Peltier said. “The nation was in or near recession, and the housing market was impacted by the nation’s overall economic climate.”

Read more at New Homes Magazine.

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