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Columbia Business School professor Chris Mayer weighs in on the state of the housing and lending market.
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All right thanks Nicole -- all set -- -- markets not a commodity tell you about a turnaround.
In the housing market and we may still talk about that but then just about an hour ago.
We found out that new home sales fell more than 7% in December from the month before it's up.
To find out what's really going -- we bring Chris Mayer and Columbia Business School professor who is here in studio with this could see Chris hey good to see of what is really going on in the housing market.
Well I would look at a one month number you know last year new home sales were up but just about 20%.
Which first up your size 2005.
And you know others there's a lot of bouncing around in sort of the -- some of the data I'm generally in the camp that Jamie Dimon is again.
Which is there's a lot of upside on the on the housing front.
Because I was looking -- we -- the comments this week speaking of -- or Jamie Dimon is.
From Bob Shiller -- a regular on our show from Yale British case -- and he talked about the fact it looks like get ahead of ourselves in 2009 we started to think.
Things are getting turned around and they really weren't but this time it's different.
You know were not Japan.
A lot of people for a long time have been talking about slow growth in the US and Japan and Japan saw real estate prices you know -- for twenty years.
The difference is we -- population growth.
What's helped the US housing market is not so much how we finance it everybody focuses on that.
Credits incredibly tight but people need to -- some worse of their investors buying homes to rent them.
You know people were sort of doing other kinds of things but they gotta live somewhere and Israelis -- population growth in household growth.
Housing will do okay where there is a lot of demand as you talked about but I go back earlier point about credit.
Being as tight as it is is difficult to get a mortgage for some people book and interest rates extremely low mean how does that situation change throughout this year or doesn't change.
I think the big question is going to be regulatory one which is what happens in Washington we're gonna have a two hour rule.
Which is gonna come out we're gonna have potentially a change in leadership.
Problem for the FHFA for Fannie Mae and Freddie Mac -- -- home.
-- is gonna tighten a little bit but are we going to see private capital come back and what are we gonna see the GSEs do.
I think all of those things still are likely to lead over time as the housing market starts to recover for credit to loosen a little bit.
And that's of course gonna start to help and we're gonna see more households be formed.
Then and we were down -- in the crisis that's also gonna be the Christ does.
And done that before we move on because you.
Had been outspoken over the last few years since the housing crisis about what the role of government should be and how government should get involved -- mean.
What are your thoughts now that we've I don't wanna say come out of that but that the -- -- -- -- sitting here talking about the fact that maybe housing has finally turned the corner.
How did we -- that the United States handle the housing downturn should have been a lot different than it was her.
You know -- What just give you one example Freddie Mac just came out with the recent study finding that for people who refinance their mortgages the default rate fell 55%.
The lack of -- refinancing policy probably cost hundreds of thousands of homeowners their homes.
And has led the housing market to come stay down further than it well we're not gonna get that now but -- you know there's still Goldman Sachs has 21 million people could take advantage of low rates and save at least a 150 bucks a month of the mortgage you -- so about a long time ago yeah I still think there's room for but I also think the government should work from -- credit bring the private sector back -- unfortunately the government is still in nine out of ten mortgages Chris -- thanks a lot from -- appreciate it.
Good to see you are stop being this.
