In testimony before Congress’s Joint Economic Committee on Wednesday, Fed Chairwoman Janet Yellen said the economy was on track for “solid growth” in the current quarter after a harsh winter that temporarily crimped business activity. But she held out housing as a potentially more lasting problem.
A housing slowdown that became evident late in 2013 shows few signs of reversing. Existing home sales in March fell for the seventh time in eight months and were 7.5% below the seasonally adjusted annual rate of a year earlier.
New building permits for single-family homes stood below the year-earlier level for the second straight month in March. Sales of new homes during the first quarter were 1.8% below the year-earlier level, punctuated by a 13% decline in March.
“The recent flattening out in housing activity could prove more protracted than currently expected, rather than resuming its earlier pace of recovery,” Ms. Yellen warned lawmakers, expressing an uncertainty about housing she hadn’t stated before. The development, she said, “will bear watching.”
Information from The Wall Street Journal
