The housing shortage that began before the pandemic will last long as market demand rises, said Homebuilder CEO Taylor morrison said CNBC on Wednesday.
“As the economy continues to improve, we will see a rise in mortgage rates, and I think this is to be expected. They are not going to stay below 3% forever, ”said CEO Cheryl Palmer. “Final call”. However, she added, “lack of supply and overwhelming demand is something that will be with us for years to come.”
Earlier Wednesday, the Mortgage Bankers Association’s seasonally adjusted index showed that mortgage demand declining for the second week in a row this week, falling 1.8% to its lowest level since early 2020. Home purchase applications and home refinancing mortgage applications declined over the week, although mortgage rates fell.
Despite these developments, Palmer expressed confidence in a “strong housing market” and strong demand in all areas and types of consumers.
“Of course we are seeing some numbers on mortgage applications, but I think we really need to separate the supply and demand that we are seeing,” said Palmer, who has led Arizona-based Taylor Morrison since 2007.
“We are at a multi-year low in terms of new and resale stocks and, frankly, it will be very difficult for us to fill the deficit, the deficit that we have been accumulating for over a decade,” she said.
House prices in the US are already rose sharply during the coronavirus pandemicas the skyrocketing interest in homes has coincided with low stocks for sale. This has raised concerns about affordability from some observers, who are particularly concerned that prices for new buyers will be undervalued.
Housing growth has slowed over the past decade due to the 2008 housing crisis, creating a “construction-in-progress deficit” of between 5.5 million and 6.8 million housing units nationwide since 2001. according to a recent report by the National Association of Realtors…
The low mortgage rates seen during the pandemic are a factor to consider when evaluating the market, Palmer said.
“In terms of affordability, the consumer buying [$300,000]“Today the house is $ 400,000 compared to last year and will be less paid,” she said. “Consumers are changing their behavior and they are not expanding themselves in the way you may have always seen many years ago. In fact, we see that the consumer has a lot of space in what he can afford to buy and what he buys. “