Fed Worried About Tepid Housing Market

From the Wall Street Journal:

A housing slowdown that became evident late in 2013 shows few signs of reversing. Existing home sales in March fell for the seventh time in eight months and were 7.5% below the seasonally adjusted annual rate of a year earlier.

New building permits for single-family homes stood below the year-earlier level for the second straight month in March. Sales of new homes during the first quarter were 1.8% below the year-earlier level, punctuated by a 13% decline in March…

Some analysts have warned that the market’s health had been overstated by a sudden but short-lived release of pent-up demand from traditional buyers last spring, coupled with aggressive purchases by investors soaking up a glut of distressed properties.

These analysts argue that broader economic problems could hold housing back, including the failure of younger households to strike out on their own because their incomes are uneven and they have high debt loads. Continued tight credit standards have made it harder for these marginal buyers to obtain mortgages.

Once again we’re seeing indicators thatĀ favor rental housing in the near/mid-term future, which is good news for those who might be concerned that the apartment market is due for a fall.