OpinionIndustry News

Real estate’s August report card

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

We are kidding ourselves that mortgage rates are not the problem. Here is why: We are asking today's buyers to pay 15 percent more per month than we asked them one year ago. Entry-level buyers simply cannot afford to make the payment, which is why so many builders are offering loan programs with subsidized mortgage payments over the first few years. Move-up buyers may be able to afford the payment, but the thought of giving up a low-interest-rate loan for a loan that is 15 percent more expensive (plus the additional balance for buying a more expensive home) is a significant psychological deterrent. Our grading system of the economy and the housing market is a "bell curve" model, with statistics at an all-time high receiving an "A," statistics near the long-term average receiving a "C," and the worst times ever receiving an "F." In this grading system, it is OK to be a "C" student. Here is our current report card: Economic Growth: C The U.S. economy has slowed from the first quarter o...