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Demand for properties began to weaken after Bernanke said in May that the Fed could slow the pace of its bond purchases. Speculation intensified in June and rates reacted with a surge that sent pending home sales tumbling 9 percent in the four months through September to the lowest level of 2013 while home affordability fell to a five-year low. Homebuilders, among the biggest beneficiaries of monetary stimulus, slipped 1.8 percent today in New York trading, according to an index of the companies. The measure has slumped 23 percent since a May peak.
Last week, the Fed policy-making board headed by Bernanke issued a statement saying “the recovery in the housing sector slowed” in recent months. That was a shift from its assessments in prior months when it said housing demand was strengthening, said Diane Swonk, chief economist at Mesirow Financial Inc. in Chicago.
“It’s clear the Fed became concerned about housing over the last month, and that’s why it came out so firmly on the side of bond-buying,” Swonk said. “After months of talking about ending the program, the statement was crystal clear it would continue, open-ended.”
SOURCE : BLOOMBERG.COM