Did Bernanke Just Kill the Housing Recovery?
That's the question Wall Street and Main Street have been contemplating this week after another spike in interest rates.
Stan Humphries, chief economist at Zillow, has a ready answer: No. "I think Bernanke's right, the housing market is strong enough to stand on its own feet." Humphries also tells Aaron Task of The Daily Ticker that homes are going to get more expensive, as financing costs go up.
Related: Housing Recovery is "Precarious," Says Economist Gary Shilling
However, Bernanke's signal on Wednesday that the Fed's aggressive monetary easing is at the beginning of the end will get people off the fence to give a "momentary spurt" to the housing market, says Humphries. He explains that a small fraction of buyers won't want to miss the chance to buy homes for less while 30-year fixed mortgage rates are roughly 4%.Watch the video above to see how high Zillow expects mortgage rates to rise by 2014.
Click here to check the mortgage rates in your area.
Investors on Wall Street, meanwhile, seem to be going all in. Homebuilding stocks like Lennar (LEN) have had a good run over the past year, and that's led to the first IPOs for homebuilders since 2004. And of course, flipping is back. "Whenever you're taking a cab ride and the cab driver tells you he's started to flip a couple homes, you know they've kinda jumped the shark there," adds Humphries.
Related: Four Responsible Ways to Reduce Mortgage Costs
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