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Housing Market Showing Signs of Hope?

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    S&P Managing Director David Blitzer on the outlook for the housing market.

  • Duration 3:28
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About a for some time hope for housing.

And today report home prices in June posting their first year over year gain in nearly two years.

Yes -- ending a twenty month streak of steady declines joining me now David Blitzer the managing director and chairman of -- -- -- index committee.

They're always great to see you and normally when I talk to you -- I think Gerri -- it's not that exciting it's not a recovery yet is -- a recovering now.

Yes I think it's definitely recovery in fact yes it was up the last time -- 2010 that that was in the government's first time homebuyers credit program.

Which -- market head fake.

-- -- the last I was up before that was the end of 2006.

Which was the peak of the housing boom.

So really looking back at 2000 take which when the housing bust began this is the first.

Still well below 2006.

Prices correct about 3032%.

Well that's something -- So I want you mentioned to you though I didn't report out from Goldman Sachs which set up.

Prices are rising.

Because more people are buying homes from people who are current on their mortgages and they're still -- time houses out there in foreclosure or.

On the books of banks that aren't moving.

So they question whether this is a true recovery your analysis.

Well I I think it is a true recovery there'll Watson reports of buying -- -- reports of shortages homes in some places.

Which is something of a surprise but -- -- quest for prices.

But what I think they write about pointing out is there are a lot of people's mortgages are underwater and.

They're facing difficult times they can even refinance that they owe more than the house in port.

Which means they're probably paying 20052006.

Level interface probably double.

What mortgage rates are today -- refinance they have money in their pocket which in -- -- to the bank.

And that's an area and that I think we made something has to be tackled what do you do about these people who mortgage.

-- mortgages shake itself out over time I mean a lot of people make the argument as soon as the government puts its big fat hand in the market place.

It really screws things up because the lenders don't know what to expect.

Home buyers are looking for a way out should the market be allowed to find its own level.

But I think two things -- not suggesting the government trying fix anything more than that.

Lot of people lost a lot of money a lot of banks have a lot of bad loans on the books nobody wants to admit this and the money's not coming back.

Home prices aren't going up by 30% or forty or fifty be sent to recover this tomorrow that.

That could be several years before you begin to get back to the what -- -- is back in -- how Long Will it take to get back to 2006.

Prices.

I get asked that question earlier today -- -- -- had to make.

What we get back to the peak in my lifetime and my answer was first the went on how -- your -- by China life.

Really is -- that long.

-- -- you know we came down 30%.

To get back up you need more than thirty be -- that -- -- the -- -- -- and its unique you know closer to 45 or 50%.

Typically in a normal marquee at one -- 2% a year from housing is only a -- ride out short answer.

Long way to go but we're seeing absolute improvement right that's right Rhonda let's err on the way I'm glad you said it air thanks for coming outside to great to see you --

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