According to Jamie Dimon, "We have seen the worst, we are at the bottom". If that name seems familiar it's because Jamie Dimon isn't just another media prognosticator he is the CEO of JPMorgan Chase the largest bank in the U.S. with more than $2.2 Trillion in assets and operations in more than 60 countries around the world.
He recently sat down with Maria Bartiromo for a one on one conversation. The interview touches on many subjects several of which could well affect the housing market including small business loan growth, moving mortgage origination away from Fannie Mae and Freddie Mac and towards the private sector, interest rates, the European Central Bank and job growth. You can read the interview in it's entirety online at USA Today.
The part of the intervew that caught my attention originally is this part:
"Q: What about housing in the U.S.?
A: We have seen the worst. We are at the bottom. We may hug along the bottom for a while, but we are at the bottom. People think housing is terrible, but the early indicators tell you a lot about where it will be in 18 months or so. Supply and demand are rapidly coming in balance.
Renting is now more expensive than buying in half of America. We're adding 3 million Americans a year. In the next 10 years, we have 30 million more Americans. Those 30 million Americans are going to need 15 million homes, or something like that. Household formation has gone so low. You had kids move back home — and, yes, by the way, it doesn't work for them, either.
And household formation we think will have to go close to a million and a half. Once it goes to (that), housing construction will probably have to go up to a million and a half. Two million jobs, and all this shadow inventory stuff will be getting better, not worse. And it's the rate of change which is important, not the absolute level.
It's still terrible, by the way. But we think it's going to get better over time. And then hopefully, maybe, we'll have some rational policies around housing which will make it better. So housing is near the bottom. Once you see employment start to grow 300,000, 400,000, 500,000 a month, you better buy that house you want really soon because it'll change in price right away."
I read, well I scan, at least two well known financial news sites each day looking for good news stories about the U.S. housing market, (I love to blog about good news), and this is the first I've seen by someone as powerful and influential as Jamie Dimon.
I think he's right. I think we have seen the bottom. We are seeing growth in the housing market here in the Phoenix Metro Area but that's my small part of the national pie. What do you think? What's happening in your part of the pie?
To learn more about the market in the Phoenix Metro Area email Nancy@NancyLaswick.com or call (602) 793-1627 for a Statistical Market Analysis. Base your buying or selling decisions on facts not opinions. The report is free.
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