While the broader national economy continues to slowly crawl out of the Great Recession, the one bright spot on the horizon for the past year or so has been the housing market. With home values increasing across the country, sales up in previously depressed markets and interest rates artificially lowered as part of the Federal Reserve's controversial quantitative easing (QE) bond-buying program, many analysts had anticipated that the momentum would continue into the new year. However, the latest home builder confidence report indicates that even with – or potentially because of – government intervention into the borrowing markets, real estate momentum seems to be cooling.
The National Association of Home Builders (NAHB) and Wells Fargo Housing Market Index dipped to 56 points in January after a downwardly revised reading of 57 in December. Last month's reading had originally been estimated at a 58, which would have been the highest level recorded since August. In a Reuters poll, economists had previously forecasted the reading would hold steady at 58 rather than take this sort of dip.
"Following an unexpected jump last month, builder confidence has essentially leveled out and is holding at a solid level," NAHB Chairman Rick Judson said in a press release. "Many markets continue to improve and this bodes well for future home sales."
Despite this positive rhetoric, the writing is on the wall that instead of having a largely quiet spring, the housing market may continue it's tumultuous roller coaster ride well into 2014. In the past week, for instance, interest rates dropped unexpectedly from 4.39 percent to 4.23 percent, according to Zillow data, and analysts warn that an equally significant jump could affect the market at seemingly any moment.
Don't take risks when the economic outlook is so uncertain, especially if you are anticipating retirement in the future. Asset protection is a must for those who invest in real estate.