(Read More: Home Builders Slow New Construction, Raise Prices)
Concerns about rising mortgage rates, which spiked in to the mid-4 percent range in just the past week, have dampened expectations for home price gains this summer. Analysts also worry that prices are rising too fast, far faster than income growth, and will soon price too many potential buyers out of the housing market.
“Today’s Case-Shiller numbers may reflect where the housing market has been in some of the frothier metros, but they are not indicative of where it’s headed,” said Zillow’s chief economist, Stan Humphries. “The housing market worm has turned over the past few weeks—inventory levels are beginning to show signs of easing, and mortgage interest rates are creeping up. Going forward, both of these factors will help mitigate extreme price spikes caused by very strong housing demand and very low housing supply.”
This latest report only tracks prices on a three-month moving average through the end of April, well before mortgage rates began their climb. Still, Blitzer contends that rising rates will not slow price gains.
Article source: http://www.cnbc.com/id/100839986