Yes, I know all about the polar vortex and the bad weather that’s gripped virtually the whole country for so long, but does a prolonged cold snap really explain what is, by all reports, a sluggish start to the so-called spring selling season?
I don’t think so.
Especially when you consider that the stock market is hovering around an all-time high, thereby creating a wealth effect and buoying consumer confidence. There’s absolutely no evidence that attitudes about homeownership have changed. The employment picture isn’t too bad. We’ve added about 200,000 new jobs every month for a year, and total employment has finally reached pre-recession levels. Mortgage rates remain almost ridiculously low by historical standards, and housing prices have rebounded nicely in most markets.
To top it all off, it’s 70 degrees and sunny outside my office today. All in all, what I’ve just described is not a situation that should depress new and existing home sales.
So, here’s my guess as to what’s keeping so many buyers on the sidelines. It’s not something singular, but instead a combination of not-so-good things. Many people have a post-recession hangover; they still don’t feel too good about the economy or their own prospects. Housing inventory is very low in most markets, so there’s not much to choose from. With home price rising, some homeowners seem inclined to wait for their homes to gain more value before jumping into the market. Low mortgages don’t create a sense of urgency.
Or maybe many Americans still haven’t recovered from shoveling so much snow.
Tell me what you think.
Photo courtesy Flickr user imuttoo
