Another housing bust?

Along with weather, the explanation seems plain. “Buying a home isn’t as good a deal as it was a year ago,” says economist Patrick Newport of IHS Global Insight, a consultancy. Higher interest rates and higher prices have made homes less affordable. In early 2013, interest rates on 30-year fixed-rate mortgages averaged 3.4 percent, says Freddie Mac; now rates on similar loans are 4.3 percent. At the same time, home prices have bounced off recent lows. According to the widely used S&P/Case-Shiller index, they’re up about 13 percent for the year ending in February.

All this has eroded affordability. Consider the affordability index of the National Association of Realtors (NAR). It assumes that a family with the median income ($63,623 in 2013) makes a 20 percent down payment and has a mortgage with the average interest rate. It then calculates how much the family would have to spend monthly to buy the median-priced home. (The median means that half the prices are higher, half are lower.) From 2012 — the recent low point — until the end of 2013, the required monthly payment rose about one-fifth. Even so, homes remain highly affordable historically.

Stricter mortgage lending standards have weakened the housing recovery. But there’s also another cause: The housing market is, to some extent, frozen. “Buyers don’t want to buy, and sellers don’t want to sell,” says Mark Fleming, chief economist of CoreLogic, a housing data company.