What Is Holding Back the U.S. Housing Market?

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May 21 (Bloomberg) -- Bloomberg’s Drew Reading examines the slowdown in the housing recovery and the issue holding back purchases. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

Writing.

Is it -- drew redding.

The fed has sided housing of the risk for the economy.

What is your take?

Housing has slowed down over the last several months.

There is no doubt about it.

There are a lot of challenges out there for buyers.

One thing that is worth pointing out, and i did not think a lot of people talk about, is .13 was an extremely robust year, special when you think about the first half.

There are some difficult comps when you canompare this year to the previous year, but there are still affordability issues, there are issues with tight credit markets, and just a challenge for buyers to be able to get out there and get into a home.

We are about five months into the fed's taper, we are hitting the spring selling season, what is the net effect from what the fed has done?

Overall, the feds actions have really cruised through the market.

As rates have started to come back up, you could see the velocity and the rate change has in effect slowed be housing market back down.

We do not expect rates to go to high toward the remainder of the year.

We are probably going to remain under 5%, so overall the environment is still pretty attractive in terms of affordability, but i think the problem that is impacting buyers is the relative affordability over the last several months.

Through, can you actually quantify, put a number on the fact that rates one year ago, the 30-year fixed was reported five percent and today it is 4.17%? can you quantify that impact?

Every 100 basis point rise is obviously going to impact the amount that a buyer can afford on a mortgage.

I do not have the exact number, but every time the rate goes up, not just the demographic out of the market.

That is in part what we are seeing, which is your point.

It is not just a slowdown because all of the buyers but because of the rate issue.

That is right.

Another issue is home prices.

They have risen dramatically.

What we're hearing from a lot of builders is what buyers are coming up, they're experiencing a little bit of sticker shock.

If they came out three months to four months ago, they are seeing one price, they come back out and the prices have risen dramatically.

So it little bit of stricker

This text has been automatically generated. It may not be 100% accurate.

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