Optimism ahead for the spring home sales season
A sold sign is posted in front of a new home in a housing development in Pacifica, Calif.
Steve Chiotakis: This week we get a slew of housing data, including previously-owned home sales today and a look at home prices tomorrow. As we all know, Houses in most areas of the country aren't selling for what they were say, five years ago. But on this first full day of Spring, when people typically do more home-buying, Fortune magazine's Allan Sloan says he thinks we could see a budding bright spot for wanna-be homeowners.
Good morning Allan.
Allan Sloan: Good morning, Steve.
Chiotakis: So why all of a sudden the upbeat mood on home-buying?
Sloan: Well there are two reasons. One reason is that the statistics seem to be better -- I mean not for every house in every neighborhood, but for a lot of places, the statistics are better than they were. And second, spring is the beginning of the full home sales season, so I actually pay attention then.
Chiotakis: I thought the housing market was still in the tank, and home prices were going the wrong way too.
Sloan: Parts of it are in the tank, and parts of it are going the wrong way, but a lot of parts I think are reasonably OK, and I suspect when the numbers come out later today and later in the week, that you're going to see a certain amount of stability. Now I'm not telling you to run out and buy a new home today because prices are going to the moon, but it may be time to actually do it if you're looking for a house to buy as a place to live, as opposed to as an investment, which is a whole other story.
Chiotakis: But don't higher mortgage rates, Allan, higher mortgage rates in the future, hurt home prices? Why would you think of buying right now?
Sloan: Well because if you bought now -- and again, you're paying the right price in a good neighborhood, and you're putting up a down payment -- if you could get a fixed-rate 30-year mortgage, which you generally can if you live through the application procedure, you have something where your costs are largely fixed. And as long as you don't lose your job, you're going to probably do OK if you hang on for at least five years, regardless of whether mortgage rates go up or down in the future. You're at a place you can afford, and sooner or later, you make out if you do that.
Chiotakis: Allan, you sound positively optimistic, not at all like yourself. What's happened?
Sloan: Well even us old curmudgeons occasionally change our opinions when it's spring and we become cheerful.
Chiotakis: All right. Fortune Magazine's Allan Sloan with us. Allan, thanks.
Sloan: Thank you Steve Chiotakis.