One Of The Best Housing Pundits Has A Great Reality Check On What's Really Going On
McBride is the author of the blog Calculated Risk, who has been chronicling every twist and turn in the economy for years.
Importantly he has a tremendous track record. He started off years ago warning about housing and the mortgage industry collapse. That proved right. Then he called the bottom in housing. That proved right.
These days lots of people are talking about the housing market sputtering out as new home sales decline, housing starts fade, and existing home sales tank.
McBride's take? Don't worry about it.
The real story is all the stuff that's going right with housing.
He rattles off a bunch of things. Here are the first three.
1) Existing home sales were down 7.5% year-over-year in March. Wait, isn't that bad news? Nope - not if the decline is related to fewer distressed sales - and it is. (fewer foreclosures and short sales).
2) Mortgage delinquencies are down sharply. See: Fannie Mae and Freddie Mac: Mortgage Serious Delinquency rate declined in March and Mortgage Monitor: Mortgage delinquency rate in March lowest since October 2007, "Only One in 10 American Borrowers Underwater"
3) Mortgage credit is tight. Hey, isn't that bad news? Nope. There is only one way to go ...
Basically, people continue to do two things: They pay too much attention to top-line numbers (rather than digging into the internals) and they spend too much time looking in the rear view mirror.
Bearish housing and homeownership is a hot meme these days. Everyone's talking about how homeownership is a horrible idea and how everyone is going to be a renter forever. The pendulum always swings. When in doubt, listen to Bill McBride.