And so the danger for the housing industry is if we see interest rates rise.
Sentiment: NEGATIVE
We've got to make greedy banks pass on interest rate cuts in full, and we've got to see rents coming down.
The housing market will get worse before it gets better.
Right now we think that rates will stay low, that you'll be able to get a mortgage below seven percent and that's kicked off a refinance boom that's going to put more money in the pockets of consumers.
Should that worse scenario materialize, then most probably our propensity to increase interest rates will be weaker.
If we allow more development, it will bring housing affordability.
The crisis and recession have led to very low interest rates, it is true, but these events have also destroyed jobs, hamstrung economic growth and led to sharp declines in the values of many homes and businesses.
What is a danger is that we stay stuck in a new normal where unemployment rates stay high, people who have jobs see their incomes go up, businesses make big profits. But they're learned to do more with less, and so they don't hire.
We think if the economy remains weak that we could see mortgage rates trail down and we think that we could see rates below seven percent into early next year.
Our economy isn't going to recover until the housing market finds its footing.
If the economy grows, housing gets better, quicker.