In July, sales of existing homes dropped 3.5% from June, the third decline in four months despite some economists predicting just the opposite. However, the average interest rate on 30-year fixed-rate loan for a mortgage fell 4.15%, the lowest on record. CEO of Realogy, Richard Smith spoke to Fox Business about what he thinks is needed to turn the housing market around.
Richard Smith, Realogy CEO spoke to Lou Dobbs about the current housing market and suggested a few steps needed to make a positive change in the market. Realogy is the parent company of a number of prestigious real estate companies including Caldwell Bankers, Sotheby’s, Century 21.
Smith first spoke about the existing home sale percentage drop seen between June and July and said, “It’s pretty much as we expected. We’re competing against a tax credit last year, which expired essentially, so that’s to be expected. Remember we’ve always said the back half of the year will outperform the first half because we won’t be competing against that tax credit, so I wouldn’t focus on the month over month issues, I would focus on the year over year issues. They are far better than the month over month. Second half of this year will outperform the second half of last year; second half of last year was abysmal. I think this year won’t be as good as many expected, but still it’s going to outperform.”
Smith also spoke about ongoing efforts to bring the housing market issue to the attention of the President. “We’ve called for a White House summit on housing. We need leadership at the most senior level of government. So, we’ve invited the President to hold a summit and invite practitioners to talk through the issues, develop ideas and walk away with a list of to-dos that would work to turn around housing. But, remember, it used to be about housing — this is about the macroeconomics – this is about jobs. With the unemployment rate as high as it is, not the standard 9.1 – 9.2 but the underemployment rate of 16.7%, that’s not going to lend well to a turn around in housing.”
He then continued to say, “Essentially we see lack of a national housing policy. You have the GSEs, Freddie Mac, Fannie Mae – where are they, what’s going to happen to them, there’s a lot of uncertainty there. Dodd Frank, a great deal of uncertainty there. They continue to kick the can down the road on issues that directly impact housing on a daily basis.”
The White House has had no response to the idea of a housing summit.
Source: Fox Business