Realistbear Posted June 6, 2006 Share Posted June 6, 2006 http://news.moneycentral.msn.com/provider/...0606&ID=5774821 June 06, 2006 10:36 AM ET Realtors see lower US home sales All Reuters NewsWASHINGTON (Reuters) - The National Association of Realtors on Tuesday lowered its forecast for U.S. home sales in 2006 and called on the Federal Reserve to stop raising interest rates because parts of the housing market are "vulnerable." "But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable," he said. Wouldn't it be nice to see our EAs begging Gordon's boys not to raise the rates? Ben is going to raise the rates anyway and watch 'em squirm. The good news is that the UK market is even more IR sensitive as it does not enjoy the protection of 30 year fixed rate loans that are common in the US. Quote Link to comment Share on other sites More sharing options...
munimula Posted June 6, 2006 Share Posted June 6, 2006 The good news is that the UK market is even more IR sensitive as it does not enjoy the protection of 30 year fixed rate loans that are common in the US. Incredibly there hasn't yet been much change in the US mortgage rates; Since the Fed started to tighten in June 2004, 30-year fixed mortgage rates first dipped from 6.3% to 5.6% in June 2005 and now sit at 6.5%. like you say, from this evidence we won't need many rate rises here to cause the same destruction to the property market. I'd say that even 5% could break the market here, 5.5%+ will definitely. All those who filled their boots on debt at 4.5% thinking it would stay that way are going to get a rude awakening. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted June 6, 2006 Author Share Posted June 6, 2006 US EAs are trying to calm the market by saying appreciation will return to normal soon: http://uk.us.biz.yahoo.com/bw/060606/20060...05691.html?.v=1 Press Release Source: National Association of Realtors Home Sales Settling Down and Appreciation Slowing - NAR Tuesday June 6, 10:21 am ET WASHINGTON--(BUSINESS WIRE)--June 6, 2006--The housing boom has ended but sales at historically healthy levels will continue, and price appreciation will return to normal patterns across much of the country, according to the National Association of Realtors®. David Lereah, NAR's chief economist, said home sales are settling into a slower pace. "In recent years we were occasionally challenged to find appropriate superlatives to describe surprisingly high home sales," he said. "Now the housing market has cooled, but 2006 is still expected to be the third strongest on record. In this case, experiencing a slowing from a hot market is a good thing because we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability . But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable." "Preserving long term affordability?" What a joker--US buyers are priced out nearly everywhere and that is part of the reason the market is crashing. Quote Link to comment Share on other sites More sharing options...
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