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Sales -- reason for previously owned homes that is except slightly last month while the supply homes on the market -- to the lowest level in thirteen years my next guest says the low inventory is driving up prices.
And yes holding back sales joining us now -- David person chief economist at nation -- financial.
David I'm struck by the incredibly low level -- of homes available on the market inventories hitting thirteen year low why is that.
You know it's low because people.
Who normally would be putting their homes in the market.
Under water some of them and the job market the job market still weak and so people put their homes in the market to move to another city to get a job.
There aren't as many of those.
And now people are still uncertain about the recovery overall in the housing market.
And so perhaps it is not putting their homes in the market right now.
And then finally we -- a lot of homes on the market of course that -- for clothes and still plenty of those but a lot of those have been taken off the market.
By investors who have come in and in either.
A fix them up and sold them or more likely have fix them up -- have to have the rented out now.
Well I guess on the upside the lack -- Holmes is helping to support prices but does that mean that once we get back into a normal wolf what is so cold normal scenario.
Prices -- actually dropped.
Well I think prices will drop although of course prices are going to be determine locally -- in -- markets.
But I think we'll see price gains moderate that a moderation.
May not come until later this year or even next year if the supply constraints are still there but at some point.
Prices will slow from the unsustainable pace of the last year and you know while that's good for some people.
It's certainly bad if you wanted to -- you don't own a home yet you wanted to buy one.
And I think could you argue that the price the national prices uprising because missing -- -- the sales in the upper end.
Are they -- markets.
Which you know artificially boosts the national average.
Well even if you which correct for that you know if you look at the you repeat transaction house prices that the case Shiller put on -- logic put out.
We're still seeing very strong gains so it's not just -- change in the mix is not just high end homes that are selling well when homes are selling as well.
And and they're going up and prices well it simply demand outstripping supply at this point.
What about access to credit it's great to have these low rates these historically low mortgage rates but how hot is it.
To get mortgage from a bank these days.
Well it's pretty darn hard.
In fact fed chair Bernanke talked about this in December.
One of the things that that we look at is the fed senior loan officer survey.
And one of the questions -- bank officers is have you Easter tighten lending standards for mortgages.
And of course living standards need to be tightened after the housing boom.
But they were tightened significantly then and they haven't really -- at all and today they are clearly holding.
People back creditworthy people that we don't want to go back to that that credit standards of the housing boom.
But were far too tight today there are a lot of credit -- households who were finding it very difficult to get a mortgage -- Yeah that doesn't help until very quickly are we getting through the -- a number of -- -- and distressed properties that shadow inventory.
We are the shadow inventory while still there and -- much larger than we'd like to see is much less than it was.
Foreclosed properties new foreclosures.
Are coming down every quarter.
Them the credit system the housing market is healing no need to -- a lot we were in terrible shape.
But it's much better now that any time that we've seen in the certainly in the last five or six years just gonna take awhile thank you so much David person with nationwide.
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