Rates increases may dampen US real estate recovery

September 28
5:21 AM 2013

According to a Reuters report, home prices in the US experienced a slow growth in July. The stalling of rate of gains were attributed to investor doubts that the rate increases on borrowing costs would keep on going up.

Based on 20 metropolitan areas, S&P/Case Shiller composite index only rose 0.6% already adjusted for the season, as opposed to the projected 0.8% gain Reuters had gathered from economists and the 0.9% gain increase recorded in June.

In an interview with Reuters Insider, Yale University economics professor Robert Shiller, who helped with the gauge, had said, "Further rate increases are going to have an effect. That's what's on people's minds now, it's those rate increases. It may turn the market down."

Jefferies money market economist Thomas Simons had said that the price phenomenon would not be picking up any time soon. In a note to clients, he said, "Home prices still have a long way to go before home prices are back to levels that predated the collapse of the housing market."

According to a private sector report, investor confidence slipped to 79.7 index, missing economists' projection of 79.9 and the revised 81.8 index recorded in August. 

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