The MBA has lowered its 2014 sales forecast for new and existing homes to 5.28 million – a 4.1% decrease and the first year-over-year drop in four years, according to a Bloomberg report. The MBA’s projection for mortgage purchase volume also saw its first decline in three years after the organization cut the prediction 8.7% to $751 billion.
The continued rise of home prices and the stubborn refusal of the economy to produce high-paying jobs has dealt a blow to the housing market, according to Bloomberg. The share of Americans who said they planned to buy a home in the next six months has plummeted from 7.4% at the end of last year to just 4.9% last month.
Although mortgage rates have stayed relatively low, averaging 4.3% this year, rising prices and stagnant wages have eroded housing affordability. In the first quarter of 213, 74% of new and existing homes were affordable to families earning the national median income, according to Bloomberg. By the first quarter of this year, that number was down to 66%.
The housing recovery seems to be stumbling, according to new data from the Mortgage Bankers Association.