00:00 Speaker A
Jim, um I talked yesterday to Meredith Whitney, longtime housing analyst, and I want to play for you what she had to say in terms of what needs to change to really inflect uh in the housing market.
00:10 Meredith Whitney
There are more buyers than than sellers right now and so that means that home prices are going to be higher for longer. Um, and then of course rates coming down by at least 100 basis points. Um, uh that would be, you know, I’m I’m going back to what the last time the housing market was hot was 2020, um, very early 2021 and rates were lower and home prices were a lot lower. So even if you had a medium correction in home prices of 10%, that would help a little bit.
00:46 Speaker A
So, obviously she’s not just talking about new homes, right? She’s talking about the housing market overall, but we are pretty far away from another 100 basis points down in rates and a 10% cut in prices. Do you agree that that’s the kind of dramatic move that needs to happen to really sort of unstick things in the housing market?
01:06 Jim
I don’t know if we need as dramatic uh a movement as she’s suggesting. I I don’t see, you know, we’re we’re hovering right about 6.1% for a a 30-year fixed rate mortgage. Uh, you know, low fives, that that sounds great to me, but uh I think anything that gets below six, you know, consistently and we stay we stay in that space for a little while. I think that’s good news. is people are certainly buying down into the fives anyway, uh through some of these incentives. Uh and so I I I, you know, again, if we have to wait till we get to 5%, I think that’s a much longer, much longer road. But I but I believe that if if you are a credit-worthy borrower, uh and now is the time to go. You can’t time the market. I think anybody that thinks they can do that uh is going to miss any kind of opportunities out there. That’s number one. Number two, uh we do have to get it change the mindset of not only buyers but sellers out there that um that we are we are not going back to 3% or 4% mortgages. That is a break glass moment, whether it’s after the Great Recession or after the COVID pandemic. Um those days aren’t going to come back. So I think it’s just really kind of socializing this this this feeling that rates in the fives are where we’re going to settle eventually. Uh but don’t time the market, get get in there now. Uh we just have to have confidence that that it’s it’s okay and that’s what we’re lacking right now. I I think seller, I’m sorry, uh buyer confidence is the is the biggest factor right now.