Also in this playlist...
This transcript is automatically generated
And talk about flying high April home prices jumping over 12% from a year ago.
That's the biggest gain in more than seven years joining us now is Brian Jacobson -- Soliai strategist at Wells Fargo funds management Brian good to see -- you make -- this you think there is gonna come out of these home prices they even the smallest wage is looking at what's been going on and Nevada California and Arizona.
I don't know if that air is gonna come out of the housing market as a whole but probably in some of the pockets where you've seen actually a dramatic increase but.
Keep in mind we're coming from very low levels so in a sense this is actually somewhat just being reflation.
Not an inflation that is it some more of a return to what would be considered normal so.
I don't think that there's -- -- housing downturn in minutes for the entire US perhaps some regions are going to be hit by a slight decline but overall we actually think that the housing market has is in -- the process of healing and reaching to a -- point.
What about the impact of higher interest rates and because again.
Just from in the recent job in the past few weeks that adds a substantial amount to Europe and your monthly mortgage payment.
If you will really does it add you know he'll get it might add fifty -- -- might add even more than that.
But won't that at least take some of the wind out of this.
Yeah you have done this unfortunate combination of interest rates moving higher and all -- credit standards are still fairly tight.
And so that's actually somewhat holding back the housing recovery which is why I really don't think that we're in a bubble territory by any stretch of the imagination for housing.
But -- interest rates do move move higher it does become less affordable the -- but keep in mind overall for the housing market 30% of all transactions in April work for cash so.
Those types of buyers aren't necessarily concerned about the interest rate but 70% of all transactions did require some form of financing and they are going to be sensitive to the interest rate increases.
In terms of housing and it's recovery how closely is the Federer is are watching that and it's overall calculation about what to do with monetary policy.
I think that really has to be a key thing that they're looking at as fires with monetary policy obviously they're focused on trying to bring the unemployment rate down.
There's very little that they can do to directly affect the unemployment rate but one thing that they have been taking credit for is the recovery in the housing market because mortgage interest rates are so -- they've -- taking credit for.
The recovery in the auto industry because those yields are those rates are low so as the rates begin to move higher -- I think are going to take notice of it and perhaps apt to intervene to keep -- whose rates from going too high too fast because they don't -- -- -- -- this recovery I love.
The fact that Ben Bernanke might be trying to take credit for your new digs in your new pickup truck even in some small and direct way.
Kind of makes me happy Ron thank you it's -- you think you.
Filter by section