The U.S. housing market appears to be headed for its broadest slowdown in years.
Buyers are being squeezed by rising mortgage rates and prices that are climbing about twice as fast as incomes, according to Bloomberg.
“This could be the very beginning of a turning point,” Robert Shiller, a Nobel Prize-winning economist known for warning of the dot-com and housing bubbles, told Bloomberg.
Shiller stressed that he isn’t ready to make that call yet.
Figures released this week give evidence of at least a cooling in the housing market. Existing-home sales dropped in June for a third straight month.
Purchases of new homes are at their slowest pace in eight months. Inventory has begun to grow again as buyers move to the sidelines.
Prices for existing homes climbed 6.4 percent in May, the smallest year-over-year gain since early 2017, and have gained the least over three months since 2012, according to the Federal Housing Finance Agency.
Shares of PulteGroup fell as much as 4.9 percent Thursday morning after the home builder reported that orders had declined 1 percent from a year earlier, blaming rising mortgage rates.
“People are saying, let’s just bide our time — there’s no great rush,” said Ed Stansfield, chief property economist at Capital Economics Ltd. in London.
Stansfield projects a 5 percent gain this year and a 3 percent increase in 2019. That compares with 10.7 percent in 2005.