Published by FOX Business | February 1, 2023
The U.S. housing market is in for a rough year, according to the CEO of one private equity investment firm.
The 30-year fixed mortgage rate dipped for the fourth week in a row to 6.19% this week from 6.23% last week. A year ago, the average rate was nearly half, at 3.54%.
“In 23′ it’s going to be slow. I think we’re going to have a tough row to hoe. I think that coming in the next year, you’re really going to see the damage that’s going on,” Pulte Capital CEO Bill Pulte explained on “Mornings with Maria.”
“We need to make sure that these management teams are completely focused on executing right now because, Maria, you got 40% reduction in orders. And the big builders, they need to step up their game right now,” he continued.
Host Maria Bartiromo pointed out that the home-buying mortgage application rate is down 10% and asked whether Pulte believes that the U.S. housing market is currently suffering from a recession.
“Pulte Group’s orders, for example, are down 40% year-over-year. I mean, that’s meaningful, Maria. So, you can call it a recession. You can call what you want, but 40% orders being down, that’s not normal.”
The FOX Business host bolstered Pulte’s claim, in turn citing the November Case-Shiller 20-city index that revealed home prices were down 0.08% in November, declining for a fifth month in a row.
Pulte continued, pointing out that many builders are using cash to pay down the interest expense of consumers.