I realize that what happened over the weekend is truly unprecedented and mostly surreal, and therefore it really behooves every American to have an opinion as to what the effect will be on the housing market and the greater economy.
But in weeding through all the “expert” and “industry” opinions, I found an interesting opposition of viewpoints from an unlikely pair: the builders and the realtors.
Yesterday on "Power Lunch," the CEO of the National Association of Home Builders, Jerry Howard, talked about the boost to the builders that an easing of credit would provide. It makes sense; if mortgage rates fall, people will be able to buy more homes. But Howard took it a step further. When asked by Sue Herera about the housing market: “So you’re calling a bottom?” He replied emphatically, “Yes, ma’am.”
I’d call that a leap, but that’s just my opinion. He himself admitted earlier in the interview that there is an awful lot of unsold inventory of homes that needs to be absorbed, and the foreclosure crisis is still weighing on the market as well. Credit was certainly one of the bigger hurdles to the housing recovery, but it wasn’t the only one.
- Pending Home Sales Fall More Than Expected in July
Now to Lawrence Yun, Chief Economist at the National Association of Realtors. He has something different to say in his release today of the Pending Home Sales Index, which is based on contracts signed, not closings, so it gauges future existing home sales (and which by the way fell 3.2% in July).
Yun wrote, “Even with the Treasury Department’s direct intervention in the secondary mortgage market, it is unclear if we will go back to sound normal underwriting criteria, or if it will remain overly stringent. The housing market outlook is very cloudy.”