Slowing Down?

Maybe just a touch.

Data from April showed that pending home sales slowed from their feverish gains and rose less than expected.  Many experts believe that this is because of limited inventory. The buyers are still there for the homes, but there simply aren't enough homes to be sold. This is especially true for real estate markets like Las Vegas. Since Las Vegas still leads the nation in the percentage of homeowners who are underwater on their mortgage, there are large numbers of homes that simply can't be sold...more than 50% actually.  As a result, home buyers are being driven to new construction.  The sale of new construction homes continued to grow in April with gains of 2.3%. This represents an annualized pace of 454,000 homes and is the second fastest pace since July of 2008 according to the Commerce Department. 

“The housing market continues to squeak out gains from already very positive conditions,” said the NAR’s chief economist Lawrence Yun in a recent statement. “Because of inventory shortages, higher home sales will push up home values to the highest level in five years.”

Meanwhile, mortgage rates continue to creep up. According to Freddie Mac figures, the average rate for a 30-year fixed mortgage climbed to 3.81 percent last week, up from 3.59 percent the week before. Last November (2012), the rate had reached an all-time low of 3.31 percent.