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Is There Mounting Optimism in the Housing Market?

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    Zillow Chief Economist Stan Humphries on the positive signs in the housing sector.

  • Duration 4:39
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At a Martin.

Now existing home sales that's -- that was the negative news we got yesterday and and it did.

Yes it was a terrible day for market news -- drove the whole market -- You say that was just -- but what gives you optimism that the housing market is really turning around -- done.

I think -- consumers it's good it's a confusing time for consumers but they really need to look at a longer term perspective of what trends are doing.

And also look at more numbers so focusing just on a month over month blip existing home sales.

You really need to look at -- it was down 34% existing home sales they're actually up 10% -- -- -- last year and that's true for new and existing for the past.

But really since December they've been up between 512% from where there were last year sourcing strong growth and if you pair that with what's happening with housing starts and home prices themselves.

The broad trend when you when you step back and look at all the numbers shows slowly stabilizing housing market.

But unfortunately nowadays eat it we're back to reality and you need 20% to put down to buy a home these days and -- -- -- that kind of actually Ashton say no one.

Most people do not have that kinda money lying around and we're seeing in the first time home -- market we're not seeing those cheap homes moving.

Yeah that's that's actually right that you you know really the market is in a lot of these hard hit markets like Phoenix and Vegas you're seeing really bifurcated market where.

Those people who are buying for some homebuyers -- mainstream buyers are really buying with FHA Federal Housing Administration mortgages -- -- began his -- three half percent.

And a lot of the bulk of the remaining buyers are actually investors or catch fire some people -- relocating from somewhere else are taking real state dollars from Wisconsin where you didn't see housing bust.

And reinvesting in Vegas or Phoenix that has seen a big.

The big recession prices so you really have those basically those the two big -- buyers in those markets in conventional buyer.

Who are able to qualify for credit in -- between present now are much smaller portion of those markets.

Not stand what -- outlook -- we've seen so many false starts you know or false restarts of this housing market.

Based on some in the government has done these these these tax credits or whatever it is.

I would call -- -- he's he's kind of phony feel good measures that may be helped a few people but didn't really change the overall housing picture.

This when you see positive -- news nowadays it's not based on this kind of artificial recovery is it.

That's what we're seeing right now is really what -- consider more organic recovery in housing market but you're right there's this this.

This -- -- seen we're seeing played on 2012 of the housing market.

Does have did you ever written all over it -- mean we're live like Charlie Brown running to -- that the football while Lucy pulls it away in 2010 and 2011.

We saw we saw robust starts -- the year on -- -- remarks with good home sales only to fade away wants worries about job growth materialized and really between a -- -- once we saw European sovereign debt issues arising tweets and we were having.

The removal federal our tax credits -- we saw a lot of that.

Stimulus we saw -- -- -- January to remarks was just because the government is paying people 8000 dollars to buy homes and if people are stupid they nearby homes and violence.

Forcing right now it's really more organic growth where people are being pulled off a defense to buy homes because homes are just so incredibly affordable and most these marketplaces right now.

But regardless of -- -- Bahamas if you don't have a job or you're worried about losing your job you're not gonna you're not gonna lock yourself into that kind of debt.

And I think -- the mentality has changed this notion that I have to have a home.

It's sort of not necessarily the American -- across the -- anymore so that's that's not gonna help the housing market recover anytime soon.

Yeah I think that you did see a real an increase -- of renting if you will during the latter part of housing recession when people have been so burned by falling home prices.

They said to themselves never again I'm just gonna rent and -- did not -- And we servicing homeownership rate is fall from a 69% down 65% so that's 45 million people who are now renters who used to be behavior owners.

But in general I think that we're starting to see that that pendulum swing back where.

-- nationwide in April according to zillow data were up about four point 6% across the year.

While home prices fell about 1% across the year.

So home prices are gonna more affordable rents are going off right at some point deeper into the map and say look I can actually buy this house for a lot cheaper than renting it -- -- -- time which I plan to limit.

Don't don't forget about property taxes of those things just keep going up to no matter what has.

It's unfortunately politicians try to get every little -- -- Stan -- good stuff zillow chief economist thanks very much appreciate it.

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