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Well that's a negative number but there are a lot of positive numbers come -- they've backed a slew of data coming -- Let's start with this April's Case Shiller Index saw home prices in twenty major cities get two and a half percent that's the biggest monthly gain on record.
And prices up over 12% a year over year sales of new homes in May coming it.
At the highest level since July of 2008 up over 2% from the month prior.
That's the recovery picks up steam there are fears of a housing bubble.
Joining me now Scott -- For -- stated Tim that route from the collings wood group -- and I want to thank whether you for coming in here Scott.
I don't know what do you say.
Well look good news could be bad news at this juncture what right pad is a pretty big backup in mortgage rates movies right to back up above -- percent.
We've had a very aggressive and quick move -- prices based on -- infantry side I'm a little concerned particularly given the reaction home builders of the last few days.
What this means is we going to the summit could be -- a little bit amendments.
Pressure on those tumbled as ten but also the concern that this is different than the housing bubble ten that we had back.
-- -- says more Americans were working you still got eleven million people that are out of work in this country right now so.
This looks to me like investment money that is -- the bubble fears coming from.
Yeah I think you're right I mean there's definitely an aspect to this market where.
You take you seen investors that have never really played this role before taking the place of first time homebuyers took 20% of the market.
I think they're starting to be a little bit attention as you see that the investors are really seeing the kind of returns that they thought that they might.
And that managing properties scattershot rentals as they call them single families.
Scattered all about.
-- our heart and it's expensive and I think that the likelihood that they're gonna see a quick exit for the first entrance is gonna happen it's gonna gonna -- some pressure on house press.
-- think appears to have 100 -- is interest rates going up and not because of the average you know those digital wrote frankly the low income.
Buyer but ten that could dry up the refinancing market and that's one of the things that the banks.
Have been profiting off for the last two years three years actually that last.
Yet no doubt I mean is that they refinance market has been about 80% on -- market.
Banks -- have been struggling to find -- enough he incoming really with tight net interest margins are doing anything they can.
Two make money in -- mortgage market has.
-- -- safe haven for sure for banks notwithstanding the regulatory pressures repurchase demands and enforcement actions.
But to sum up her fee basis it's been unbelievable.
And the margins have been you know historically higher than any of them have ever experienced so the hangover from losing that refinance business is going to be painful.
Yes I -- a -- -- grade I did he.
The difference is -- -- -- recovery is coming very late in the cycle this time.
And it's very fragile it's spreads -- -- things like higher interest rates and so it is going to be choppy recovery going forward and I just think over the some will probably gonna lose -- in the -- -- a.
OK so let me ask you this tem Glenn back to all -- senior in particular with the -- we've seen in the home dollars.
A we're sitting interest rates ticking up there's no signs that that's gonna abate any time soon.
What do you say to the average investor that has profited from all of us homebuilding stocks has made all this money whether it's on an investment properties except for what do you say to that person now is the fear.
A truly -- and at this point -- Now I think we got a lot of room to run if you think about it so you -- -- the rapid appreciation that we've seen case -- which is a very conservative.
Index showing 1214%.
There are markets that are still off 3040%.
From their highs and you're seeing demand.
At a historic basis -- even though you saw new home sales propping up to 400000 or so that's like a third of the historical average.
And really about a third of where we need just to satisfy the current demand.
Interest rates sure they're going up.
That's gonna take 2% probably for them to go up sufficiently just to catch up due to the affordability rate of -- rental properties so a lot of room to run here.
And then -- -- interesting that you both basically you're telling me that you you don't bring up that concern about a bubble but that there are some very it was so they're gonna have to keep our eyes on we have to keep following this story has got credit to emirate.
Gentlemen thank you very much appreciate it.
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