Spring is usually the time when potential home buyers hit the road in search of that perfect house, and sales pick up. But this spring isn't looking so sunny.
Housing starts in March rose less than expected, at a 2.8% annual rate, housing permits fell 2.4% and pending home sales in February fell to their lowest level in almost two and a half years. Homebuyer traffic in 40 major U.S. markets in March was down about a third from a year ago, according to a Credit Suisse index.
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"We might have already seen the peak of the recovery," says The Daily Ticker's Aaron Task. "Unless overall economic activity picks up and wages pick up we may be plateauing in the housing market."
And there's more data to support that thesis. Mortgage lending is at a 14-year low, 30-year fixed mortgage rates are averaging about 4.6% vs. 3.6% a year ago and the homebuilder confidence index last measured 47 (below the key 50 level) indicating more pessimism than optimism about the market.
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In addition, investors, like the Blackstone Group which had been binge buying homes to rent are retreating from the market. Its housing acquisitions are reportedly down 70% from a year.
But rents have been rising. The real estate website Zillow and the New York Times found in an analysis that the median rent in 90 cities now exceeds 30% of the median gross income in those cities.
"You can't afford to buy a house, but you can't afford to rent either," laments The Daily Ticker's Lauren Lyster.
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