I was on Fox Business yesterday summarizing the conflicting housing data. Here is a brief summary of my comments:
- The recovery is still occurring but at a more normal pace.
- There are huge differences by geography. Las Vegas and San Francisco have both appreciated 20%+ in the last year, but for completely different reasons.
- Entry-level buyer activity is slowing down, not because of rising mortgage rates but because the most qualified buyers have already purchased.
- Mortgage lending is only getting slightly more aggressive and won’t heal completely until the Dodd-Frank QRM rules get defined.
- Home sizes are rising because that is what consumers still want. While some older buyers are choosing to downsize and first-time buyers are being forced to buy a smaller home, the number of people desiring larger homes is much greater.
The foreign buyer is also having a noticeable impact on price increases, particularly in the hottest markets. Given the diversity of nationalities involved, this is a complicated part of the puzzle we are working hard to understand. We welcome any insight you may have.