USA TODAY: …Q: Why has housing taken so long to recover, and how much supply is on the market?
A: Supply in the market really has to be divided to understand where we are. You have a distressed market, which is short sales and foreclosures. Then you have an existing home market that is not a short sale or a foreclosure. Then you have a new home market. So you have three distinct markets. You’ve got still a load of supply of foreclosure, though it’s less than it was. You do not have new home supply at all. New home sales have gone down to 250,000 a year single-family, 300,000 a year on an annualized basis. That’s less than a third of a normal year supply for new home sales….
Q: How long can rates stay this low?
A: I’ve seen plenty of cycles. And interest rates, since I’ve been in business, have never been this low. You’ve got a 10-year Treasury at 3%. You’ve got mortgage rates for 4% and 5%, a jumbo is 4⅞%, You’ve got tremendous interest rates. We’ve got to wait until the Fed stops QE2. When the Fed stops buying bonds, you should see some escalation in interest rates and some drop in the price of bonds because the biggest element of demand is going to leave the market… (more)
