The latest data provide further evidence that housing market activity has come off the boil. Existing home sales declined in September, and the sharp drop in pending home sales points to more falls ahead. Homebuilder confidence also moderated in October. Higher mortgage rates are to blame for the slowdown in activity. While rates have fallen back recently, the impact of the Federal shutdown means that mortgage applications for home purchase are still declining. Finally, there have been some signs that, driven by weaker demand and an increase in supply, house price gains are also slowing. Nevertheless the latest data is consistent with a slowdown, not a reversal, in the housing recovery.
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