Investment Firm CEO Warns U.S. Housing Market Seeing “Meaningful” Damage
Pulte Capital CEO Bill Pulte talks about the housing market, as the U.S. 30-year fixed rate mortgage rate drops to 6.1% for the fourth consecutive week. ‘Mornings with Maria.’
The U.S. Housing Market According to one CEO of a private equity investment company, it is going to be a difficult year.
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“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,” Bill Pulte, Pulte Capital CEO, explained on “Mornings with Maria.”
“We need to make sure that these management teams are completely focused on executing right now because, Maria, you get 40% reduction in orders. And the big builders, they need to step up their game right now,” He continued.
According to Bill Pulte the 2023 housing market will slow down. (STEFANI REYNOLDS/AFP via Getty Images / Getty Images)
The 30-year fixed rate mortgage rate dropped to 6.19% for the fourth week, from 6.23% last Monday. The average rate, which was 3.54%, was almost half of what it was a year ago.
Maria Bartiromo, host, pointed out that the rate for home-buying mortgage applications is down 10% and asked Pulte if he believes the U.S. housing sector is currently in recession.
“It’s going to be a tough row to sow the rest of the year. And I think you heard that on the earnings call. I think you’re going to see that coming into – even next year, frankly – Because, Maria, these orders are down,” He stressed. “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.”
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Pulte was supported by the FOX Business host, citing the November CaseShiller 20-city Index that showed home prices had fallen.08% in November. This is the fifth consecutive month of declines. Bartiromo claimed that this report’s nature would be an “encouragement” Consumers can “get in the market,” Many are instead getting a mortgage rate “sticker shock.”
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“It is. But Maria, one of the things, and you should know this, that’s really happening in the industry, which is why a lot of these builders and VR reported. For example, last night the third-biggest builder, they reported a great report as well,” He explained.
On his appearance “Mornings with Maria,” Wednesday was Bill Pulte’s argument that the U.S. needs its big builders to be rehabilitated ‘step up their game’ We are trying to alleviate the weak real estate market. (Photographer: Rebecca Noble/Bloomberg via Getty Images/Getty Images
Pulte continued by pointing out the fact that many builders use cash to pay down interest costs for consumers.
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“So effectively, you know, you showed that the rates were 6% plus maybe 7% in some cases. They’re able to get these rates down to like 4% with what the builders are offering in terms of incentives,” Pulte concluded.
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