Are We About to See the Shortest Housing Cycle Ever?
Odd Lots
Bloomberg
4.4 • 1.6K Ratings
🗓️ 24 July 2023
⏱️ 42 minutes
🧾️ Download transcript
Summary
Last year, as the Federal Reserve hiked rates to the highest levels in decades, there were lots of warnings about an imminent collapse in the US housing market. But home prices have only dipped slightly since then and now they're even recovering, stacking up three consecutive month-on-month gains. Not many people expected the most interest rate-sensitive portion of the economy to be this resilient. So what happened? Morgan Stanley housing strategist James Egan was one of few who was early to forecast that home prices would prove resilient, even as the cost of mortgages went up. In this episode, he walks us through how he sees the housing market now and what it would actually take for home prices to come down.
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| 0:00.0 | Oddlots is brought to you by interactive brokers. Access to vast selection of global fixed income securities at IBKR's bond marketplace. Search their deep availability of over 1 million bonds globally. |
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| 0:30.0 | I'm Akshatrati and this summer on my podcast zero, I'm doing a series about climate storytelling, how we talk about climate change and what it means for how we confront it. |
| 0:40.8 | This week, I'm interviewing journalist Amy Vestavelt about reporting on the history of climate denialism. |
| 0:46.8 | I'm a big believer in the idea that you can't effectively solve a problem if you don't really know where it came from. |
| 0:54.6 | Listen to zero on the iHard Radio app or wherever you get your podcasts. |
| 1:10.1 | Hello and welcome to another episode of the Oddlots podcast. I'm Tracy Alloy. |
| 1:14.8 | And I'm Joe Wisenthal. |
| 1:16.1 | Joe, do you remember this time last year, some of the discourse around the housing market? |
| 1:21.4 | Yeah, of course. I mean, this was like really like when people were like waking up to the sort of like eye popping mortgage rates. |
| 1:27.7 | At least by recent standards, you know, zoom out, maybe not that high. But by recent days, like, oh, this is it. |
| 1:32.5 | Housing is sort of over crash. Price is plunged. We're back. |
| 1:37.5 | That's exactly it. So we had a really historic run up in benchmark interest rates. |
| 1:43.5 | And those were translating into higher mortgage rates. |
| 1:46.9 | And everyone thought that this was going to lead to a, you know, in some people thought it would be a house price collapse. |
| 1:55.2 | Others thought it would be some sort of impact, something significant one way or the other. |
| 2:02.1 | And yet fast forward 12 months, I'm looking at the case shiller index. |
| 2:07.6 | We had like a tiny dip, you know, relatively small going into the end of last year. |
| 2:14.4 | And now house prices are rising again. |
| 2:16.5 | We basically had like the shortest housing bear market ever. |
| 2:20.4 | Yes, really tiny dip in prices. Every index you mentioned, I saw some other one. |
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