US housing market staring into face of perfect storm: expert

NEW YORK -- The US housing market is currently "staring into the face of a perfect storm," which is a "bad sign" for the American economy, Fox Business on Friday quoted National Association of Home Builders CEO Jerry Howard as saying.

"Our own Wells Fargo NAHB Housing Market Index (HMI) declined three points this month because builders are saying things are going to 'dry up.' You've got a combination of the costs ... regulatory compliance and now at the other end of the pipeline, interest rates are going up," said Howard.

The housing expert made these comments after pending home sales declined for the fourth consecutive month in February. Howard said he's "very worried" that the market could "really slow down."

Asked whether customers walk away if they're preapproved for a mortgage and the price happens to increase significantly, Howard answered that consumers have walked away even before signing their housing contracts, and this has been an issue nationwide.

US home prices are rapidly increasing faster than people make in an entire year, projecting price growth to reach 22 percent year-over-year in May, while the Federal Reserve's recent rate hike has resulted in rising borrowing costs, in addition to already historic highs for home prices, according to the report.