What's Spooking House Buyers?

A lot may be riding on the ability of America's housing sector to bolster the economy in the year ahead. Residential investment is a bellwether--normally leading the way in upturns and downturns--and it spiked up during the summer in the wake of sharply falling interest rates. Since then, though, it has been losing ground. "The housing recovery has apparently stalled," says economist Lacy H. Hunt of HSBC Holdings Inc.

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