The housing shortage that began before the pandemic will linger long as market demand increases, house chief executive Taylor Morrison he told CNBC on Wednesday.
“As the economy continues to improve, we will see an increase in mortgage rates and I think that should be expected. It will not stay below 3% forever,” CEO Sheryl Palmer said at “Closing the bell.” However, she added, “the lack of supply and high demand will be something with us in the years to come.”
Earlier Wednesday, the seasonally adjusted index of the Association of Mortgage Bankers showed that the demand for mortgages decreased for the second week in a row this week, declining by 1.8% to its lowest level since early 2020. House purchase requests and mortgages to refinance homes have both fallen by a week, although mortgage rates have fallen.
Despite these developments, Palmer expressed confidence in the “robust housing market” and sustainable demand in all areas and types of consumers.
“We certainly see some numbers around mortgage applications, but I think we really need to separate the supply and demand we see outside,” said Palmer, who has led Taylor Morrison of Arizona since 2007.
“We’re at multi-year lows when it comes to new and reselling inventory, and, honestly, it’s going to be very difficult for us to make up for the shortfall, the deficit we’ve been creating for more than a decade,” she said.
House prices in the US have increased sharply during the coronavirus pandemic, because the sudden interest in houses coincided with small stocks for sale. This has raised concerns about affordability among some observers who are particularly concerned about whether customers will have prices for the first time.
Housing inventory growth has slowed over the past decade since the 2008 housing crisis, creating a “gap in underbuilding” of 5.5 to 6.8 million housing units nationwide since 2001. according to a recent report by the National Real Estate Association.
One of the possible bright spots in the near future is the new one in June the lists have increased 5.5% year on year and 10.9% compared to May, according to Realtor.com. Historically, low ads were seen between May and June.
The low mortgage rates recorded during the pandemic are a factor to consider when assessing the market, Palmer said.
“From the point of view of affordability, the consumer who buys [$300,000]”House for $ 400,000 today compared to a year ago, their payout will be lower,” she said. “Consumers are changing their behavior and not extending in the same way you may have always seen it many years ago. In fact, we see that the consumer there is a lot of space in what he can afford and what he buys. “