This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Housing Prices: Prepare for a Moderation

NEW YORK ( TheStreet) -- The recent heat up in the housing market could soon experience a decline in mortgage applications and a moderation of prices.

New-home sales rose 2.1% in May to a seasonally adjusted annual rate of 476,000, according to the Census Bureau, while the S&P/Case-Shiller 20-city home price index in April gained 12.1% year over year.

"Mainly I think what we would expect to see is mortgage applications fall a little bit and price gains moderate," said Brad Sorensen, market and sector research director at Charles Schwab. "Prices would still go up, but not at the same rapid rate, and that's what you would expect to see during a recovery anyway."

The environment has shifted rapidly to a seller's market as inventories remain low.

Housing prices slowly have been recovering from their post-recession lows, and this is now being coupled by rising sentiment that the Federal Reserve may start to raise interest rates sometime in the near future. That discussion is somewhat muddied as Fed Chairman Ben Bernanke said last week that the central bank wouldn't begin to raise the federal funds rate very soon, while the benchmark 10-year Treasury note has risen substantially since early May.

Rising prices and the possibility of rising rates has triggered more participants into the market.

"I think a lot of people have caught on to the fact that all of this wasn't going to last forever," said Diane Saatchi, an associate broker at Saunders & Associates in the Hamptons of Long Island, N.Y. "There are some sellers looking a little bit worried because they kind of see that if interest rates start rising, maybe the economy's not as good as they thought it was."

-- Written by Joe Deaux in New York.

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
XHB $35.65 -0.86%
IYR $78.71 -0.61%
AAPL $124.24 0.69%
FB $82.85 -0.08%
GOOG $556.29 -0.45%

Markets

DOW 17,701.79 -16.75 -0.09%
S&P 500 2,059.50 -1.55 -0.08%
NASDAQ 4,869.5550 -6.9640 -0.14%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs