by Calculated Risk on 1/01/2015 08:47:00 PM

From Nick Timiraos at the WSJ: Housing Market Enters 2015 Facing Affordability Pressures

Some of the price declines were exacerbated by a glut of foreclosures. The subsequent rebound reflected increased investor demand for those bargain-priced properties ...

As foreclosures have faded and investor-purchasers stepped back from the market, price gains have slowed. In October, home prices had increased 4.6% from their year-earlier level, compared to a year-over-year gain of 10.9% in October 2013.

An open question in the coming year is whether price gains stabilize at those lower levels or whether they weaken further. Research firm Zelman & Associates expects price gains of 4% in 2015 and 3% in 2016.

But some market specialists say prices may need to give if sales are to rise. “In a few markets, there will be price declines,” [Glenn Kelman, chief executive of real-estate brokerage Redfin] said, “and maybe in more than a few.”

Friday:
• At 10:00 AM ET, the ISM Manufacturing Index for December. The consensus is for a decrease to 57.5 from 58.7 in November. The ISM manufacturing index indicated solid expansion in November at 58.7%. The employment index was at 54.9%, and the new orders index was at 66.0%.

• Also at 10:00 AM, Construction Spending for November. The consensus is for a 0.5% increase in construction spending.