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Chandan Economics CEO Sam Chandan and Supreme Lending executive director Rodney Anderson weigh in on the housing market.
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Thank you Nicole.
-- home prices posted their strongest gain in six years for the first half -- 2012 but housing experts remain divided over whether this recovery is for real.
We have a bearable on this question the bears -- Tendency of -- -- economics but let's start with a bolt Rodney Anderson of supreme lending in Dallas.
Rodney you think this recovery is finally for real.
Absolutely we're in the bottom of the second inning of a nine inning baseball game we're not an extra -- here to bottom of the second any.
I will tell you I have talked to more.
Buyers this morning eight to 10 already this morning.
That one out put contracts on properties this -- -- where this is unusual it normally slows down in September and October there is no slowdown -- -- In -- worst start to see sales on pace for the 20062007.
We're -- increase that quickly.
All right Sam -- -- home prices first half strongest gains in six years existing home inventory eight year low what's not to like.
Another couple things we on a -- think about what it is that is actually driving some of the improvements and one of the key factors here we sought even just in the FOMC's decision about how it's gonna stimulate the economy last week.
Is the fact that we have record low interest rates not only in the broader market but also for home mortgages when rates are as low as they are there's going to be some response of the market people are gonna go after the gonna -- an axis mortgage credit they're gonna try and buy homes.
Look at the number of homes that were selling at today's interest rates we -- actually moving a lot more and the problem then becomes the question of well.
Can we really support can we sustain these increases in home sales once rates begin to rise and that has got to be real concern for.
-- you know up -- should we even care that the fact that artificially low rates are driving that.
No I mean look at every CEO of every major homebuilders went on record in fact this CEO of K hobby alien was on.
Your show just a couple weeks ago state net we've seen the bottom and so when all the major homebuilders are are -- and all the confidence levels are rising.
I'm telling you right now low interest rates home affordability are driving the market.
But also there's two bills in congress HR 2086.
And HR 6363.
That there were hearings on last Thursday.
In the -- house subcommittee.
On up.
Financial institutions and its consumer credit this would generate more credit put it into consumers hands therefore increase in the housing market and even helping -- More okay.
-- a sample it wasn't that the whole.
Point of low interest rates is distilled the purchases should we have absolutely no there there's nothing to.
WB disappoints about -- home sales begin to come off their bottom there's no doubt about that where I think we need to be careful -- and realizing that.
A lot of the gains that we see in the market today are a function of the fact that we have these artificially low rates and so we need to sustain home sales a stronger underpinning.
That once rates begin to rise what are the things -- which allows to sustain home sales and that's going to be not.
Monetary policy interventions of an extraordinary order.
It's going to be much more mundane things like job -- so would you tell your mom don't buy a home right now the prices going Miller five years here's what I think we would be doing the market we would between those potential buyers out there -- real disservice if we told them that.
They could suddenly throw caution to the wind and jump back into the housing market is still need to approach it very very judiciously and what do we have to keep in mind here is that I know we -- home builder sentiment is up -- more homes being built.
Two factors here one is that we have an aging inventory because we haven't had much building over the last couple of years and so that's not actually -- lead to some increase yes.
The other thing that we know -- cycle home builder sentiment about where the housing market is going is probably the worst indicator we have what we should be doing.
And yet -- as you point out every CEO virtually every main home builder says we were at the bottom not to worry.
-- the mom -- would you tell your mom to -- home today.
Yes I would Warren Buffett's talent everybody to go buy homes Donald Trump says.
Gold -- real estate even to his employees I would tell you I'm a big -- right now.
Gold buy houses I love that I personally went out bought K hobby -- -- DR Horton and home builder index fund six weeks ago 'cause K jobs up over 50%.
That means were moving forward.
All right well thank you very much for debate that don't Rodney Anderson.
And Sammy the bear.
