3 Reasons to Be Worried About the Housing Market

Over the last few weeks, there have been a slew of reports suggesting that the housing market is stalling, if not going in reverse. With the exception of new home sales, virtually every housing number suggests trouble.

The Commerce Department kicked things off two weeks ago by reporting that housing starts dropped by 16% in January compared to December. The National Association of Realtors followed this up with data showing that existing home sales fell in January to the lowest level in a year and a half. And most recently, an influential report showed that home prices receded on a monthly basis in the final month of last year.

The one exception has been new home sales. On Wednesday, investors learned that sales of new single-family homes grew at the fastest pace in January in more than five years. According to the data, new home sales were up by 9.6% last month, coming in at the highest level since July of 2008.

In the video below, Motley Fool contributor John Maxfield discusses these trends and reveals the most commonly cited explanation for the downturn.

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John Maxfield

John is The Motley Fool's senior banking specialist. If you're interested in banking and/or finance, you should follow him on Twitter.

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