You're watching...
Hovnanian Enterprises CEO Ara Hovnanian on the challenges still facing the housing industry.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Today's -- for stocks just barely that.
-- the roof is falling in -- the housing sector August home starts sliding more than the expected 5%.
It's almost like the roof fell one and nobody is cleaned it up yet just bouncing along the bottom for more now on what's holding down the reconstruction of this dilapidated market.
We're joined by Ara Hovnanian president CEO home builder Hovnanian Enterprises Aaron good to see you have to -- that.
But yet another number where people are saying when -- we see that the bitter end of this and we start to see a few rays of sunshine come.
Yeah actually there was mixed data -- starts were down the permits were up.
But that's been the story it's mixed if the market is just going nowhere as you said bouncing along the bottom that's been the story for.
Quarter of -- corporate well the Fed thinks that by.
They they will be able to draw more buyers -- but buyers think these are historically low rates for mortgages and it's not and buyers are coming in.
If the Fed moves and down just to take more the second make a difference here is the problem rates are fabulous as -- -- -- Lower rates are always better.
The real issue is mortgage companies are not qualifying buyers because the pendulum has swung.
-- too far in the other direction too restrictive who restricted.
Possible credit and not get more of a kind.
Let's get to that I was just talking to my brother who has good credit and a decent down payment He said house if you're gonna buy a house you now need 13%.
Who has 30% did.
All depends on the price range there is mortgage money available with much lower down payments but the requirements.
Are.
You know it's it's a natural knee jerk overreaction to the -- standards of the sub prime debacle.
But it's going so far that it's choking off the recovery -- is anybody listening to you when you go down to Washington say that and I tell you it's amazing to me frankly that the administration.
Has some control I know the congress ties up Fannie Mae Freddie Mac.
The administration does have some control with the FHA.
If they want -- real jobs -- housing is that record historic lows.
There are customers that want to buy a house they just can't get a qualified.
Yet but get to this issue of amnesty on and on mortgages that are underwater.
Should have been done a while ago.
-- -- -- in terms now re financing -- just just cutting people -- mean I think it's unfair I think it rewards bad behavior but if we're really gonna turn this -- around.
Well there there are two different issues one is the notion of good payers -- on time with their mortgage payments.
Allowing them to refinance their mortgage even if they don't meet the normal appraisal standards so they've been paying the government's on the hook for the loan.
But they are paying a 6% rate.
They can take advantage of the low rates right now because perhaps the loan to value doesn't qualify or something in the tighter credit standards don't qualify them.
But were already on the hook.
Why not below that might that help the economy.
But I I can't really economy recover without a housing recover you know it hasn't been done yet and that's why I'm amazed that there hasn't been more focus you can't.
Generally have a an economic recovery without housing loose -- -- revenues.
Just get back to normal reasonable and rational mortgage lending standards and we could help free samples of good work there are a thing absolutely we like reasonable -- -- -- there.
