“Unusually disruptive weather across large stretches of the country in December force people indoors and prevented some buyers from looking at homes or making offers,” NAR chief economist Lawrence Yun said as the report was released.
Federal Reserve policy makers cut the pace of bond buying for a second straight meeting yesterday, uniting behind a strategy of gradual withdrawal from Ben S. Bernanke’s unprecedented easing policy as Janet Yellen prepares to succeed him as chairman. While the recovery in housing has “slowed somewhat,” economic activity has picked up, policy makers said after concluding their two-day meeting.
Home Prices
Home prices continue to rise. The S&P/Case-Shiller index of property prices in 20 cities climbed 13.7 percent in November from a year earlier, the biggest 12-month gain since February 2006.
Mortgage rates are rising along with prices, reducing affordability. The average rate for a 30-year, fixed mortgage was 4.39 percent in the week ended Jan. 23, up from 3.42 percent a year earlier.
Still, after two years of rapid growth, real estate agents and homebuilders continue to see opportunity in the market, said Donald Tomnitz, president and chief executive officer of D.R. Horton Inc., the largest U.S. homebuilder by revenue. The company’s weekly sales picked up early this month, which could be a sign of strong demand to come in the spring. D.R. Horton, based in Fort Worth, Texas, this week reported its most profitable first quarter since 2006 as it raised prices.
“Housing market conditions continue to improve,” Tomnitz said on a Jan. 28 earnings call. “We personally are counting on higher sales this year than a year ago.”