Although housing prices have rebounded since the recession and are generally good for existing homeowners, affordability has become a serious headwind and is slowing purchase activity as mentioned in the article. As I like to tell my kids, too much of a good thing can be bad, and we’re seeing that dynamic play out in the housing market. Hopefully, recent decreases in borrowing rates coupled with new home supply can begin to relieve price pressure so that affordability improves and entices buyers back into the market.
C&J Wealth Advisors
Article Credits: The Wall Street Journal Market Watch | June 4, 2014
Upsetting expectations from a Nobel Prize winner, as well as the world’s No. 1 central banker, it looks like borrowers aren’t clamoring to buy homes in the face of low and falling mortgage rates.
In late May, Nobel Prize-winning economist and home-price expert Robert Shiller said drops in mortgage rates could stimulate the housing market. “These declines matter. People are watching mortgage rates,” he said.