Housing Market Expected To Retreat

April could turn out to be the housing market’s last hurrah as higher mortgage rates take a toll on buoyant home sales and home construction.

Analysts said strong home sales earlier in the year showed fence-sitters were jumping to purchase homes and lock in affordable mortgage rates before they went higher. Now, as rates have risen, fewer would-be buyers are left on the fence.

The last of them may have jumped in April, said Tom Carpenter, chief economist with ASB Capital Management in Washington, which holds about $6 billion in bonds.

“The May housing data will start to reflect the increase in interest rates,” though it could be June before sales and starts show significant declines, Carpenter said. When the housing downturn comes, it’s likely to last through the end of the year, he said.

April home sales numbers, to be reported next week, could reflect last-minute deal closings on still-low rates, economists said. Economists surveyed expect existing home sales to be down 2.6 percent, while new home sales are likely to show a gain of 3.7 percent.