US Homes resales fell more than expected in December as the supply of houses in the market dropped to levels last seen in 1999.
“The dip in housing sales is more a sign of the lack of homes to be bought than the desire to buy homes,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “It is hard to sell homes that are not for sale.”
The pace of income growth is lagging behind that of property values. Combined with the sting of higher asking prices, affordability constraints mean rental demand will remain robust, allowing investors to maintain a solid foothold in the market, according to Lawrence Yun, NAR’s chief economist.
Shortgage of land and skilled workers are also appears to be a challenge to builders.
Increased borrowing costs doesn’t help either which stood at an average of 4.23% for 30 yr fixed rate mortgages.