I am a little late with my posts today – got home late last night from the Real Deals’ New Development Conference in New York. I got a lot out of it.
The CEO of Whirlpool said yesterday that [he doesn’t see a housing bubble [BW].]((http://www.businessweek.com/ap/financialnews/D8G706BO8.htm?campaign_id=alerts) They forecast a modest decline in demand for applicances from construction. His comments seem to be on par with NAR’s. No bubble, moderating sales and existing home sales have more of an impact.
This is one of the things that is given short shrift in the ongoing debate about the economic impact caused a change in the housing market. A lot has been discussed about direct employment, such as sales brokers, mortgage brokers, construction workers, etc. But what about support services and products to housing and the potential ripple effect?
If mortgage rates are trending up as the Fed combats inflation, then this position by St. Louis Fed President does not seem to be plausible [Reuters]. Mortgage rates are dampening demand immediately while an improvement in household income would not likely provide an immediate, if any, offset to buyer’s higher mortgage payments.
The U.S. housing sector may already be cooling but it should level off at high levels and not undermine the country’s economic expansion, St Louis Federal Reserve President William Poole said on Wednesday.
My hunch … is that housing activity will stabilize and remain at a high level this year,” Poole told the Regional Chamber and Growth Association at a breakfast meeting.
I base this forecast on the belief that the FOMC (policy-setting Federal Open Market Committee) will keep underlying inflation low and stable, and that the growth of real household income will recover nicely due to the waning influence of last year’s spike in energy prices.
Where the heck is that Maytag repairman guy?