Today I spoke with David Lyyken about the state of the housing market in America.
Some questions that we discussed were:
1. Where will mortgage rates go?
2. Will home prices in America rise again?
3. How will the Fed impact long term rates?
4. What should one make of the oil crash in America and how will it impact oil states?
5. Where have all the first time buyers gone?
6.What is really causing the shortage of homes? Hint: It is not an inventory problem.
The housing pundits have failed this country by lying that low inventory has kept national sales from growing .
The truth is that from 2012-2015, there has been more inventory than at any point in time from 1999-2005. Low sales growth is due to demand, not supply. Demand is low because buyers have insufficient incomes and assets – and this is due to demographics, debt and the Great Recession. So the next time someone in media tells you housing is held back due to inventory remember this chart :
More Inventory years 2012-2015 than any period from 1999-2005
Mortgage purchase applications have been the true walking dead this cycle, as I predicted back in 2010. 2014 was the worst year every recorded, once adjusted to population. The rise in 2015, just makes 2015 the 2nd worst year ever recorded. All this has happened while mortgage rates have been below 5% since early 2011.
Interview below, starts at the 34 minute 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