Red Hot Housing Recovery? Not Quite

The pundits have caught up with us. Wednesday's report on new home sales from the Commerce Department "raised concerns" among economists that the housing market may be overheating. We have been warning that the conditions for this have been present for the past several months. Ironically, this has been due to the rise in mortgage rates in the second half of last year. That rise is driving a buying panic among those on the bubble--that is buyers who barely qualify for a mortgage and those who might have been undecided about purchasing before rates moved up.

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