Logan Mohtashami discusses the spike in housing inventory on CNBC
In a recent segment of CNBC’s ‘Worldwide Exchange’, HousingWire Lead analyst Logan Mohtashami and host Frank Holland dive into last week’s spike in mortgage applications and housing permits.
According to recent data from the Association of Mortgage BankersMortgage applications for new homes increased by 0.7% year-on-year in June 2024. This increase follows the recent decline in mortgage rates, which approached the 7% mark on Friday, according to HousingWire’s Mortgage Rates Center.
As a result, homebuilders and developers are also more confident that rates will continue to decline over the next six months, increasing the number of new homes and permits. But Mohtashami notes that it is too early for lower interest rates to impact the market.
Meanwhile, construction labor is another problem facing the market. Recent data shows that building permits for single-family and multi-family homes are at historic lows.
“We are concerned about the construction labor,” Mohtashami said. “Multi-family permits are near recession lows and single-family permits are down, so you’ll want to keep an eye on single-family permits as housing starts numbers come out… and Let’s see if the decline of recent months has stabilized somewhat. .”
According to recent Federal Reserve According to data, the number of new homes added in June was a seasonally adjusted 1.353 million, which was 3% more than in May. Inventory has also grown in recent years, with single-family home supply reaching 650,000 units last week, according to Alto’s research facts. Price growth should slow in the second half of 2024, and homebuyers will have more choice as interest rates fall.
“If mortgage rates go to 6% or lower, we will have many more choices for Americans,” Mohtashami said. “We are ready for lower rates if that happens, while we were not ready for lower rates in 2022 and 2023.”
Despite the inventory growth, Mohtashami said affordable housing in America is still somewhat of a “myth.” Mortgage rates and home prices would have to fall for homes to become more affordable, but this will likely be a multi-year process if current inventory levels remain stable.
