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Can't -- and more on housing University of Maryland economist -- -- -- he joins us now from Washington DC good morning Peter.
Are we getting ahead of ourselves and bring in the -- talking about all the good times to common housing.
What we may -- mean these record low interest rates remember lower monthly payments a great deal and caused folks to bid higher.
On housing and as a consequence when the Fed ultimately raises interest rates again in the future we may find that we have a bit of a bubble.
In some of these very attractive markets that the wealthy have.
Again over -- a bit now it won't be as bad as the last time.
But it may be a period of time before they see real appreciation after that and any return on the investment so people applying these houses.
They should buy them -- they want to live in them.
Not because they want to hold them for three years in them flip them for something better.
Peter what can the government do to make this better and what will the government do to mess this up.
Well the government really should stick it should just focus on getting the economy to grow so that that you know let's focus on the houses that cost 400 ridge a thousand dollars.
You know its markets like Detroit and and and Las Vegas where there was a big -- a neighbor found that it's great but in many places those out houses still -- really moving.
And the best thing the government can do is get the economy growing or raising taxes increasing health care -- the usual let -- is not helpful there.
-- -- what about.
W said that if to buy homes people should want to live in on.
But -- less like Florida if you look at some of these buildings and have now who are the people who were buying these condominiums that are for sale.
They aren't -- and then on these places are in -- day and they're all -- -- And their bottom -- stores of value whether it's rush you're -- really around the globe to how much of our demand is being driven by people they don't mean live here.
Well in places like Florida it.
There's a lot of that because the condos became worth so little you have speculators and you also have people from abroad.
Who want to store value because there's a lot of risk where they are.
I think it depends -- what they pay for them and that's really hold different person I'm talking about the guy who works for a living or you know works of Fox News and good plans on being -- -- went and wants a house in New Jersey.
But I'm saying is is that it's not the old days of -- home -- -- -- three years selling for more.
And then buy another house rather you should buy that house -- you wanna be there but there's a lot.
A foreign demand because a lot of money's being made in places where there regimes are not all that stable and the folks they have to -- Peter credit standards still too tight -- they gotten better where they gallon.
Well credit standards have loosened up a bit but the big problem that.
We have is not so much that banks have credit standards that are too tight.
But rather the community banks in the regional banks which are most of our banks and historically did the lending have two problems.
That they did did -- reform legislation put very onerous reporting requirements on these folks.
Many of whom had noted in the financial crisis and that fighting it too difficult to make mortgages and meet the the regulatory requirements of the government.
And the second thing is.
That they can't sell off the mortgages the way they used to and they don't have the deposit base remember about 55 banks controls 60% of the deposits in the United States.
So these regional banks historically would lend money out they -- some of their deposits for that.
But then they'd sell the mortgages to big banks in New York could resell them.
The securitization market.
And that's not bear the -- -- today.
Peter it's good to hear from me this morning and some wise advice sage advice as always Peter -- live forests and -- care fatal that was okay now.
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