'Home Affordability Index Has Never Been Better For Home Buying', But Buyers Missing

There has never been a better time for home buyers to buy new properties with interest rates being low and the U.S. economy in good share. However, home sales are still not anywehere close to the pre-financial crisis period.

David Stevens, Mortgage Bankers Association CEO, was on CNBC recently to discuss the outlook for the housing market and what’s stopping home buyers from buying new properties.

Not Back To Where We Should Be

“April is going to be just a hair better than March,” Stevens said. “But the reality is our overall year-over-year estimate, we are actually lowering our forecast from what was going to be a little over a half million in sales down to about 487,000 sales.”

“So, the real story behind this story though…is that compared to pre-recession period, we are really way down below where overall home sales including new home sales should be, when you look at the pre-recession level, which will be more in the range of a million sales per year.”

He continued, “So, an improvement over where we were a year ago, we were running about flat till last month, but we are nowhere near back to where we should be kind of if you again look at kind of pre-recession kind of normal.”

Why Are They Not Buying?

Steven was asked that with interest rates near zero, what’s stopping home buyers from buying homes. He replied, “The home affordability index has never been better for home buying, but you have got a few variables, right? Consumers are, some are rebuilding credit from whatever occurred during the recession.”

“I think there is a consumer piece, right? We have less wealth, lower wages in this recovery. There is a regulatory climate as well that’s keeping lenders much tighter in the credit markets than they have even traditionally been [far] pre-recession before the bubble,” Stevens said.