Winter still has grip on pending home sales, housing market
Posted on Monday, March 3, 2014 at 7:38:02 AM
Even while residential financing rates remain historically affordable, buyers may be encountering difficulties across the housing market due to cold temperatures and severe winter weather.
According to the National Association of Realtors, the Pending Home Sales Index, designed to predict future activity, only ticked up 0.1 percent between December and January. This relatively stable metric may be related to snow and ice across most of the U.S., keeping buyers indoors.
Lawrence Yun, chief economist at NAR, explained that the weather may have been a disruptive force for home shoppers this season. He added that limited inventory also had a hand in the little-changing conditions, as well as tight credit and waning affordability.
Pending home sales may not be the only element of the housing market affected by cold weather. Recently, the National Association of Home Builders reported that residential construction hasn't been exempt from the harsh conditions.
"Cold weather clearly put a chill on new home construction last month and this is also reflected in our latest builder confidence survey," said Kevin Kelly, chairman of the NAHB. "Further, builders continue to face other obstacles, including rising materials prices and a lack of buildable lots and labor."