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George Mason University Professor Anthony Sanders breaks down the latest economic data and what it says about the future of the economy.
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Sony and for Gerri Willis tonight a number of reports on the economy today will force some experts to revise their forecast.
The rest of the year home prices falling again compared to this time last year.
But -- -- -- the -- the worst is now over.
But don't tell that to millions of Americans feeling the economic pinch consumer confidence plunged again.
So what is it all mean Anthony Sanders is a distinguished professor real estate finance.
And George Mason university and he joins me now I guess -- -- consumer confidence number somewhat of a surprise considering that we believe.
Through the -- that the US economy was doing better why the shift and confidence.
-- harvest pressure up does make some sense that -- came down because.
Here's the problem since oh December of 2011.
Initial jobless claims are exactly were they were then -- stuff that's kind of bounce around.
Okay housing prices okay how to address Richmond and and then -- here's a little factoid since.
June of 2010.
The number of people who have dropped off unemployment.
Was more than matched by the number of people going on disability.
By a 100000.
So again this -- not a lot of reason to be confident in the economy right now.
OK well you mentioned -- let's dig into that because that really was another report -- rally amid generally affect those the stock market today but at the same time -- was surprising to see this is price.
Drops happening throughout the twenty city index.
What is you make of case Shiller today.
I mean many are looking for this bottom so to speak but to -- pre crisis levels with prices.
That's a bit of a shock.
Well again we we -- just going through a bubble were on the downside some good news this is kind of looks like it's kind of bouncing along little bottom the bottom of the river.
-- good news and Arizona's Phoenix.
It's risen from the ashes and starting to come back but the interesting thing about the data share also lost the markets -- declining.
Some of the sand states where we had the worst of the housing bubble burst.
Is now starting to recover like the West Coast some cities in Florida are coming back.
The negative is what's amazing the data is that the heartland is starting to kind of crash.
-- Minneapolis Chicago Detroit Atlanta are all falling faster than FaceBook.
Funny that you did say that but not really if you look at admitting you're a volleys and been told by -- experts -- one of Fox Business that housing is it a regional story always -- that you're the city's.
That we saw -- new lows hit a way to Chicago biggest new York and Portland.
At the same time you mentioned Phoenix and then you took you look at -- cities in Florida.
And we're seeing a shift yet it's all cash investors up the banks are coming to the table here for housing it looks like cash investors are coming and does that tell you that never gonna start to see prices kind of starts up to rebound a little bit throughout the rest of the year.
Well again that all the -- how -- we have a truly sustainable recovery with cash only and investors.
I'm -- output -- little cap on that until the banks start lending again or Fannie and Freddie start loosening their credit standards.
Right now I think it's Fannie Mae has -- 750.
Credit score requirement.
-- that's pretty that's it much harder than the last ten years so the effectively choked off the credit pump as -- now were relying on cash and is there enough cash out there that.
Real really reboot the housing market no of course not.
Well what about first time home buyers because if you look at under employment -- particular for that sub sects of the population is under the age of thirty.
They're the ones that have been easily crisis but when it comes to not having a job.
Do you think that it if we see the -- -- we're gonna get jobs number on Friday do you think if we see it may be a decent.
Jobs number on Friday that that could be a signal two economists -- start to raise their estimates for house.
-- -- I don't really think we're gonna see we might still a little bit -- remember.
For every positive number we have coming out what's a jobless claims decreased.
Remember we have historically -- art high number of -- weeks on unemployment.
All time high we're still not getting out of this fast enough so I'd love to see that and that would be a great boost to the housing market -- remember Cheryl.
-- -- incomes also flat line we're not seeing the growth and income -- that help the economy would say and that's who's gonna get really -- -- the under thirty crowd.
And remember FHA is tighten credit but there's also credit overweights from the lenders on top of that picture -- even if you think you qualify for a paycheck.
You still may get tonight along -- the under thirty crowds really hurting.
Okay let's talk about some single bit different here and that is the quote unquote fiscal clip that many are warning about this country's gonna hit.
At the end of the year the expiration of the bush tax cuts do you think that if we see a reversal in congress.
That could be a strong signal for the economy let -- -- we get that until November December is different story -- understand but if we do get some type of decent extension.
Would that help.
Well aside from Europe which is primarily collapsing over there it's sending shockwaves are -- we also the tax issue.
So we have on the fiscal side we have all the bush tax cuts.
Going away and then put an addition -- that we have all -- the Obama care.
-- additional taxes coming on record so this could be the single largest increase in taxes in American history.
How goes the economy and housing market gonna react to that big jolt so who's gonna gonna have to do some -- and they probably.
I hope.
Decide not to let the bush tax cuts expire just keep rolling them on for awhile otherwise you know we are in for -- -- but hitting a fiscal cliff that -- This this is not going to be good.
Alright professor senate before -- go easy question for you.
What would fix the economy one thing you think would fix the US economy right now.
Well one thing to fix the US economy is.
Stop regulating -- so heavily hold back a little bit let the market breathed we're suffocating.
The private sector right now.
And that is not good for job creation.
-- that would help bring jobs back to help bring income to grow better that's what we need we don't need more government we need less government of.
That's -- Sanders is certainly an instincts take from me and I think many Sherry you're is that particular unload fix the US economy -- Chelsea.
Great to have -- nice to meet your professors and -- that you for being here.
