Housing recovery stumbles

by MPA20 Jun 2014
The housing recovery seems to be stumbling, according to new data from the Mortgage Bankers Association.

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%.

 

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