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TD Ameritrade Interview – My Outlook on Housing

I joined Oliver Renick on TD Ameritrade Network last Friday to discuss the housing market and some of my recent comments from the newest Three Minute Macro video. In short:

  1. Interest rates over 6% creates an unaffordability problem that is likely to put downward pressure on prices as demand dries up and supply increases.
  2. This isn’t a 2008 repeat, however, because you won’t have the low quality adjustable rate borrower being forced to panic sell.
  3. We’re also unlikely to see a financial panic because banks are much healthier and the Fed is much more involved in shoring up the financial markets at the first whiff of contagion.
  4. Housing is likely to be fragile for several years until the supply/demand imbalance in the interest rate market corrects.
  5. My estimate is that prices could fall 10-15% at the national level and perhaps more in hotter markets.