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Slow economic recovery leading to sluggish home sales

January 17, 2011 - The latest analysis of the overall economy and real estate market from the Federal Reserve banks showed that slow moving activity persists across much of the country.

That's largely because buyers and consumers are reacting to sluggish economic development, according to the Fed's Beige Book. A majority of the Fed's districts reported weak housing markets "with little change from the previous reporting period," noting that Kansas City and Richmond, Virginia, have actually seen home prices stall or decline.

On the plus side, builders in St. Louis appear to be readying construction for new homes due to rising demand from buyers ready to start packing their moving boxes again.

Additionally, reports from Philadelphia, Atlanta and Chicago, show that buyers in those areas are willing, but are having difficulty finding access to the credit they need to purchase a new home. In Boston, the sale of high-priced homes helped push median home prices higher, but localized reports such as those weren't enough for experts to raise their long-term outlook for housing.

Access to credit remains a concern for many buyers, and has proven to be a roadblock for many relocating to a new home. Zillow.com reported last year than nearly a third of all Americans have credit scores too low to qualify for a mortgage.
 

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