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Home affordability at 2007 bubble level but crash unlikely: Blackstone

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Wall Street’s big companies are striking in parallel with the housing bubble.

Joe Zidle of Blackstone calls homes that are about as affordable as the 2007 peak. Still, he thinks it’s unlikely that a crash will occur due to a major difference. Most owners don’t use their homes like ATMs.

“It has turned so many people upside down,” said CNBC’s chief investment strategist.Fast money“On Monday.” The value of what they rented was greater than the value of their home. “

Unlike home bankruptcy, Zidle adds that home equity is the highest ever and household balance sheets are strong.

“You haven’t experienced overbuilding. You haven’t experienced a decline in credit or lending standards,” he said.

Blackstone Buy Scores for Distressed Homes It led to the financial crisis of 2008. It is still a major player in real estate, with investments in rentals, rental markets and student housing.

“I think there is less risk because there is little excess of housing,” he said.

In addition, Zidle Quote a strong employment market..

“Historically, housing is more correlated with the labor market than mortgage rates,” he said. “As long as the employment market is relatively healthy, I think housing will be.”

His predictions come when Wall Street is preparing an important consumer and housing report this week. Investors will benefit from major retailers, including: Walmart, Home Depot, Loews When Goal.. In addition, homebuilder sentiment and home sales figures are due.

Zidle’s phone reflects a 12-month time frame. To that extent, he expects the Federal Reserve to raise interest rates next year more than Street expects due to sustained inflation.

“Ultimately, the Fed will have to raise interest rates until something breaks,” Zidle added. “When we get To the point where something breaks, I don’t think it’s a house. “

He expects a benchmark 10-year government bond yield Reach 3.5%. That’s the level he expects the housing market to handle. It was about 2.8% on Monday and has increased by 90% so far this year.

“House prices may generally level off. In some areas there may be a weakness that home prices may fall,” Ziddle said. “But as the economy eventually overthrows, I think the idea of ​​a nationwide decline in housing and a long-term decline in housing is still a relatively low probability.”

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