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John Burns Real Estate Consulting CEO John Burns on the latest housing data and what it means for the recovery.
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Thank Jeff fox thank you well -- -- out despite superstore and sending delaying other data.
Releasing that -- it's been good news and bad news situation so let's take a look home price growth.
Slowing in August that it reached the highest level since September of 2010 John Burns CEO John Burns real estate consulting.
Joins us now.
With more on what's driving that recovery mr.
burns what -- what are your first thoughts on the recovery.
Other that the home prices have been recovering all year -- educational or is it done.
What happened five months ago it's very delayed we think home prices are up 3.2 percent over the last year.
Investors are driving a lot of it at the bottom end of the market and we're now you've been seeing flippers again god forbid so off.
We're we're we're seeing that and then we're seeing consumers particularly those that may be -- call -- six or seven years ago -- -- -- homeownership and those that got their mortgage must mortgage 1520 years ago.
By their retirement European -- -- flippers are driving the recovery right now and it's modest at best would you not agree what are still some of the major headwinds that the housing industry faces.
Well this though homebuilders need more price appreciation in the outlying areas for them to kick start recovery again I'd say that would be number one.
Number 22 years after Dodd-Frank we still don't have any clarity on the mortgage rules so the mortgage industry -- dog huge problem.
Had.
Three now let them they're getting a recovery we're starting to see construction costs go up and this hurricanes gonna make it even worse.
-- -- -- can you elaborate on the points up pertaining to Dodd-Frank rules and the uncertainty there and and those who are most affluent knows homes in particular.
What we may see ahead.
Sure so there there are two things in Dodd-Frank -- Q&A Q are unqualified mortgage and qualifying residential mortgage they haven't defined that the banks don't know what the rules are so they're lending very conservatively conservatively.
That the affluent and of the household we're seeing more cash purchases than ever.
Because that affluent households tend to be skewed towards people that are self employed that have a very difficult time documenting their -- com.
Order people to get a lot of their compensation in terms of bonuses and and the banks can't say okay you make X dollars per year every year or so they're they're making it very difficult on those folks and some of them are saying you know what I got my cash I'm just gonna -- -- -- -- is an investment plan that's an overall for the next five years ten years as we talked about suffers as actually alluded to earlier.
Yeah I was a raging bear for five years and I'm a raging bull right now I'm in India -- particularly if you look at it from -- payments standpoint.
He can't guarantee where prices are gonna go good good good god the payment as a percentage your income is probably as long as they're gonna see.
Well we've seen the market awash with cheap money from the Fed John Glenn says he mentioned to let banks is still very Leary to pass on this cheap money that's essentially just -- it.
When do you think we'll see these credit conditions and those.
That are eligible to get a mortgage will actually be able to get a mortgage.
Well actually -- it's it's easier to get a mortgage than most people think it's just those few groups that I mentioned that have a tough time documenting there in com my I've got a lot of home builder clients and if you've got a job they can they can get your mortgage you might have to pay a 5% interest rate all in through FHA.
But even -- with -- collaborate it's it's pretty good.
And for the rest of the mortgage market issues that the regulators need to tell the banks cure the rolls right and then the banks will take off and start under running me -- OK John Burns CEO of John Burns real estate consulting.
And what drove all this housing recovery thank you so much right.
