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Well the National Association of Realtors is saying today that contracts to buy homes in July -- to your high.
That is just the latest in a string of recent positive housing data.
But my next guest says we are still not in a recovery.
Joining me now Fox Business exclusive patent single resource real estate.
In a recovery we're seeing prices higher.
Existing home sales pending home sales case Shiller I mean.
What are you saying that we're not here.
Well we may be reaching some point of stability recover recover usually implies -- prices are gonna go back up.
What we're seeing right now we think has a large part due to seasonality of home sales the spring and summer when people go out there and try to buy homes and that can inflate their prices.
Let's wait and see what the numbers look like a later in this year after we get through this seasonality.
Because there's a lot of risks that we -- still see out there.
Unemployment remains quite high.
It's very hard for us to see an increase in home prices until those wages really start moving up and that can't happen with unemployment and the 8% maybe even in the 7% range.
We're watching what's going on in Europe and China and that's very concerning we think this slowdowns are happening there could happen here.
And clearly that would provide some real downside risk it and in homes.
But most importantly.
We look at -- US housing market today and 25%.
Of mortgages are underwater today.
That's a huge number there's over a 1000001 point three million.
Are foreclosed homes and inventory right now the banks are holding onto that is a huge overhang OK it's going to be tough.
Let me let backups for want to -- that I found released sure you're talking about unemployment look it's probably gonna be above 8% for some time when we're pretty much know that an economic forecast for getting in from the Fed.
At the same time you -- -- demographics I think that's interesting are you saying.
A that that younger demographic that's when he -- -- normally be going out buying their first home.
Is staying home with mom and dad they're not buying that first -- is that what you mean.
That's that's exactly that it will what's gonna happen to what's happening as we we have 95.
Million -- -- yields people born after 1984 there in their twenties now.
And they're starting to approach that age where they would typically like most generations go out and start thinking about buying homes.
But the -- -- are quite different number one is.
They are really unemployed and under employed at that ratios are higher than the rest of the country about 53% of them are unemployed or underemployed.
They have huge -- debt -- on their balance sheets from student housing loans which is increased 55% in the last seven.
V move around a lot the average mulling -- -- kinda hit thirty years old -- had seven jobs and so.
He stuck in our house from -- moving around from job to job like that is very difficult but maybe the most important thing Cheryl is that they have witnessed the housing bubble deflates.
They've seen what's happened to their parents they're terrified air rightfully so about the immense risks they go wind up owning a.
Okay that's a shame I think that's actually -- I think we're gonna right that's horrible no doubt I think that owning a home is as a as a wonderful thing even if you are.
22 years old I don't a lot of time with liberal quick what's the one thing you would point to -- your research disconnection turn housing around just just one thing.
Right I think -- seen over time what -- work through this supply.
And it is going to get to a point where reverts to its normal rate of return the real rate of return for single family homes the last thirty years.
His bit about a less than half of a percent.
So we think that -- scene -- covers.
Will sort of keep doing that that's the normal sort of keep up with inflation but I would expect -- a lot more and again I think that at some those -- years and think about when they go -- -- rent an apartment stressing hate.
I wanna have my deposit in the S&P 500 which is growing a lot faster right I have to worry about the checks and concentrator with.
And -- -- out of Philadelphia.
You naturalistic guy got -- -- is gonna talk to you very interesting take on housing.
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