A few key points going over my 2016 Housing Predictions in the interview
2016 Housing Prediction Article
Pending Home Sales: Pending home sale numbers have been soft lately. This is not due to the new TRID regulations. TRID has only delayed sales.
From Doug Short:
– Home Prices: Existing home prices still have room to move up because there is less than 6 month of inventory and no new distressed market have been created outside of oil states.
– Housing Starts & Permits: Housing starts and permits also have room to move up, with rental construction still hot. Single family home starts however, show no signs of over investments in this cycle.
– New Home Sales growth has been decelerating since mortgage rates moved from 3.625% to 4.125%. Builders profit margins could take a hit in 2016 if they cut prices to achieve more sales. We should still get at least 4%-8% growth in new home sales with some upside if more lower priced homes sell.
-Existing Homes: Existing home sales is the only housing metric that could go negative, year over year. This is because we are no longer comparing sales to a very low bar set the previous year. Additionally, the number of cash buyers in the market is falling. We should see some months with less than 20% of sales done with cash. Housing affordability is also an issue, especially if rates rise to 4.5%. That said, I am expecting existing home sales to be between 5.13 – 5.43 million for 2016. Total existing home sales should end 2015 between 5.15 – 5.25 million, I was looking for 5.0 – 5.2 million for 2015.
From Doug Short:
With Kathleen Hays on Bloomberg starting at the 4:20 mark.
Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1988 and is in a partnership with ZeneHome.com