No Bubble-Like Housing Boom Now: Former Pulte CEO
While housing is making a moderate recovery, prices are unlikely to return to the boom times that led up to the 2006 peak before the bubble burst, former Pulte Chairman and CEO James Grosfeld told CNBC on Monday.
The real estate market is "not going to be what it was in 2005 or early 2006" because mortgage lending standards are much tighter, he said in a "Squawk Box" interview. "You don't have these, what I call, irresponsible mortgages out there that make it very, very easy to buy homes."
(Read More: Housing Recovery Rides Rate Roller Coaster)
The April S&P/Case-Shiller home price index showed a monthly record for gains. But since that reading, "mortgage rates are up very significantly," Grosfeld pointed out, as bond yields soared in the wake of Federal Reserve Chairman Ben Bernanke's remarks about possible conditions for tapering the central bank's bond purchases later this year.
(Read More: Home Prices See Record Gain in April)
"You've [also] had an increase in guarantee fees. You've had an increase in down payment requirements," continued Grosfeld, a trustee for real estate investment trust Lexington Realty and a director on the board of financial firm BlackRock. "All of this is going to have a moderating effect on home building—both on home building and on the sale of new homes."
The bigger, national home builders will have "less competition from small home builders," he added, saying, "They have good cash flow on a going-forward basis because they're protected by their deferred tax accounts for many years."