- Miller Samuel Real Estate Appraisers & Consultants - http://www.millersamuel.com -

Housing Can’t “Recover” Until Fundamentals Recover

Posted By Jonathan Miller On August 20, 2013 @ 1:58 pm In Economy,Housing Indices | Comments Disabled


Source: Yahoo! Finance [1]

I had a nice conversation with Lauren Lyster today over at Yahoo!’ The Daily Ticker [1].

I find the bifurcation (yes Bernice, I actually used this word!) between those who see the housing market as recovered and those who don’t fascinating. A recovery is a process and we are in the middle of it – but it hasn’t reached it’s destination. As far as the <7% unemployment comment in their post headline goes…I see housing as normalizing when employment normalizes – not that 7% is a trigger for housing to suddenly recover below this threshold. Nuance, baby.

Why else would so many fret about rising mortgage rates? Nearly every comment on the video – 146 when I wrote this, referenced the weakness of the job market, under employed, lower wages.

I think rising rates are a good thing for housing, long term because they take some of the froth out of the market. Seriously – how can prices rising more than 12% YoY with flat income, high (but improving) unemployment and tight credit? One could even argue that a better rate spread with higher rates and bank business decision pressure to loosen standards as refi volume drops sharply will bring some easing to underwriting standards eventually.

Aside
If you want to get some clarity, watch this video earlier this morning over at The Daily Ticker on Why Investors Should Ignore Economists [2]. No one makes a point more clear (or more bluntly) than my friend Barry Ritholtz [3].


Article printed from Miller Samuel Real Estate Appraisers & Consultants: http://www.millersamuel.com

URL to article: http://www.millersamuel.com/housing-cant-recover-until-fundamentals-recover/

URLs in this post:

[1] Yahoo! Finance: http://finance.yahoo.com/blogs/daily-ticker/housing-market-won-t-recover-until-unemployment-falls-154740344.html

[2] Why Investors Should Ignore Economists: http://finance.yahoo.com/blogs/daily-ticker/why-investors-ignore-economists-121046880.html

[3] Barry Ritholtz: http://www.ritholtz.com

Copyright © 2014 Miller Samuel Inc. All rights reserved.