The U.S. housing market has been showing evident signs of a slowdown - sales have been low, prices have been stumpy and foreclosures have been 186 percent above the peak time before the market crash. Is this something to worry about? How can the slowdown affect home buyers?
Last week, Freddie Mac - the government-backed lending giant - released a report claiming that real estate markets across the country were stabilizing. While Freddie Mac called it "stabilizing," it was more of stalling.
The latest Multi Indicator Market Index (MiMi) revealed that 13 of the 50 states and District of Columbia were in a stable range with about eight of the 50 metro areas showing no change in the housing indicators like home purchase, mortgage applications etc.
Another latest report by real estate intelligence firm FindTheBest revealed that currently, home prices and median home sales are about 7.5 percent below peak levels right before the property market crash, reports Forbes.
The first few months of 2014 saw the housing market stumble due to the cold freeze. Although there has been improvement in the second quarter, a full-fledged activity hasn't taken off yet. Pending home sales in fact, fell unexpectedly in June due to a weak wage report.
But, experts say that a slowdown can be good for home buyers and investors. According to The Wall Street Journal, the slowdown is a great opportunity for new buyers to take advantage of. Prices are low, inventory is inching up slowly and interest rates are still at record lows - all contribute to a great buying environment.
"From an individual perspective, the best investment you can make is to buy a primary residence. Today financing costs are extraordinarily low. You can get a 30-year mortgage somewhere around 4.5 percent," John Paulson, head of Hedge Fund firm Paulson & Co., said in a statement.
Some are predicting that the market will pick up steam in the coming months.
"We may see a late season summer push in housing activity. Inventory is picking up and mortgage rates are hovering around lows for the year, which make things a bit easier for first-time buyers," Nela Richardson, chief economist at Redfin, told Reuters.
"The economy is normalizing from whatever went wrong in the first quarter. Growth is up and running," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York, told the agency in an earlier interview.
