Dive Brief:
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Despite an overall consensus among economists that housing will continue its slow recovery in 2015, CNN Money has identified five blips that could “derail the whole thing.”
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At the top of the list of “things real estate watchers are keeping an eye on” is the exodus of institutional and foreign investors from the U.S. housing market. Landlords who purchased huge numbers of rental properties are getting ready to take advantage of home price appreciation and sell them, the analysis predicted. And as the dollar strengthens and U.S. housing becomes more expensive, fewer international investors are interested in buying here, it said.
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Other possible pitfalls for housing this year, according to the analysis: Income will not rise as fast as home prices, making it harder for would-be buyers to afford homes; mortgage lenders will continue to make it difficult to qualify for home loans; and mortgage rates could increase more than expected, which could make homebuying less affordable.
Dive Insight:
If those threats to the housing recovery take shape, builders would have to lower home prices considerably to continue selling their product. Most economists, however, are predicting a moderate interest rate hike and have said they expect banks to ease credit standards and down payment amounts in an effort to make homeownership more attainable for first-time buyers.