WEBVTT - Stevens: You can't deny data

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<v Speaker 1>Broadcasting live to New York Bloomberg eleventh wo to Washington,

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<v Speaker 1>d C, Bloomberg ninety nine one to Boston, Bloomberg twelve

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<v Speaker 1>one to San Francisco, Bloomberg nine sixteen, to the Country

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<v Speaker 1>Series Exam Channel one nineteen and around the globe the

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<v Speaker 1>Bloomberg Radio bus Apen Bloomberg dot com. This is Bloomberg

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<v Speaker 1>Surveillance and good morning. I'm Karen Moscow along with Tom

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<v Speaker 1>Keene and Michael McKee. The opening dale brought to you

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<v Speaker 1>by s E. I imagine when usset management servicing is

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<v Speaker 1>unconstrained by infrastructure. See how SCS Global Operating Platform can

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<v Speaker 1>be your catalyst for business expansion at se S dot com.

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<v Speaker 1>Slash imagine stocks lower at the open, the S and

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<v Speaker 1>P five hundred down a tenth of upper center two

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<v Speaker 1>and a half points to twenty sixty one down. John's

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<v Speaker 1>Industrial Average down a tenth of upper center seventeen points

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<v Speaker 1>to seventeen thousand, seven hundred two. The nasdags down a

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<v Speaker 1>tenth of upper center six points to forty seven thirty

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<v Speaker 1>one tenure treasury of three thirty seconds. The YELD one

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<v Speaker 1>point seven four percent yield done a two year point

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<v Speaker 1>seven seven percent. Nine x s crude oil down one

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<v Speaker 1>percent or sixty one cents to forty six O nine

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<v Speaker 1>a barrel comex goal down to tens per cent or

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<v Speaker 1>two dollar sixty cents to twelve sixty eight seventy. Announced

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<v Speaker 1>the Euro at other thirteen twenty three the N one

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<v Speaker 1>oh nine point one one, Tom and Mike Karen, thanks

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<v Speaker 1>so much, Michael McKee, Um, this is a really important

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<v Speaker 1>UM screen or let me get it up. You get

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<v Speaker 1>all the research and j more like at FTN with

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<v Speaker 1>Chris Lowe was channeling me. Later today, the Atlanta FEDS GDP,

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<v Speaker 1>now cast already at two point two percent, is likely

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<v Speaker 1>to be revised higher. And that's the import of this

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<v Speaker 1>retail sales. We're gonna go into the weekend with, oh,

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<v Speaker 1>it's really not that bad. Maybe this is the tipping point,

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<v Speaker 1>and don't forget the previous The March number was revised higher,

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<v Speaker 1>which will imply a higher first quarter GDP when the

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<v Speaker 1>world was in theory coming to an end. One of

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<v Speaker 1>the things that's been keeping the economy afloat has been

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<v Speaker 1>home sales. UH. They've been relatively strong, UH and under

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<v Speaker 1>the radar they have been volatible. But under the radar

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<v Speaker 1>for a while. Dave Stevens is the CEO of the

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<v Speaker 1>Mortgage Bankers Association, and if you want to get a

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<v Speaker 1>handle on where mortgages are going and home sales are going,

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<v Speaker 1>that's the guy to talk to. You Can I say

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<v Speaker 1>that they're an industry group and he's always talking to

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<v Speaker 1>the angle. But they have the clearest literature of these

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<v Speaker 1>Beltway organism. They've got the numbers. They published The Mortgage

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<v Speaker 1>Bankers Applications Index shows you mortgage applications, refinance applications, all

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<v Speaker 1>kinds of things every week. So Dave, to quote the

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<v Speaker 1>immortal Ed Cotch, former mayor of New York, how are

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<v Speaker 1>we doing, hey, Tom and Mike. It's uh, you know,

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<v Speaker 1>it's an interesting story. To your point, it is kind

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<v Speaker 1>of the sleeper story. Um, I think what people just

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<v Speaker 1>are the data. You can't deny demographics of what they are.

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<v Speaker 1>And as you know, we went to a very sluggish

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<v Speaker 1>period with household formation during the recession and we're now

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<v Speaker 1>forming you know, about one point for million households annually.

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<v Speaker 1>This millennial generation is a real deal. It's not a story.

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<v Speaker 1>It's eight plus million young people who the oldest cohorts

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<v Speaker 1>are now moving into homebuying and the demand for both

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<v Speaker 1>rental units and owned units is a positive story across

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<v Speaker 1>the boards. You're seeing demand for apartment units and single

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<v Speaker 1>family rental extremely strong. But we're also seeing continued growth

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<v Speaker 1>in the purchase sector of new homes up about on

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<v Speaker 1>average over a year ago. UM. So this last month,

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<v Speaker 1>it it dipped a little bit over March. UM. April's

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<v Speaker 1>numbers were down a bit, but that's sort of seasonally typical.

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<v Speaker 1>We usually peak for the year either March or April.

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<v Speaker 1>It sort of shifted back and forth over previous year's.

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<v Speaker 1>March was the stronger month of the two. Well, you

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<v Speaker 1>you look at the mortgage applicate the amount of money

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<v Speaker 1>people are borrowing and gives you a hint just to

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<v Speaker 1>what size house they're borrowing. To try to get an

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<v Speaker 1>idea of whether the starter home people are coming into

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<v Speaker 1>the market. Yeah, if they buy, then other people are

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<v Speaker 1>moving up. How's how's that going? Well, that's you know,

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<v Speaker 1>that's the story of the disincentives, particularly in the housing

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<v Speaker 1>market to build entry level units. UM. You know, the regulations,

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<v Speaker 1>land costs and labor costs to bring a unit to market. UH,

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<v Speaker 1>as well as concerns about whether credit availability or for

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<v Speaker 1>first time homebuyers is going to be there for that

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<v Speaker 1>marketplace has forced UM many of the new home builders

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<v Speaker 1>to stay at the upper end of the market. So

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<v Speaker 1>it's improven slightly. The average loan size dropped a few

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<v Speaker 1>thousand dollars in April from the previous month, but it's

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<v Speaker 1>still three dollars on average per unit that's been built.

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<v Speaker 1>If you if you look at resale market, you well

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<v Speaker 1>below three hundred thousand in terms of average sales price. So, um,

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<v Speaker 1>we aren't building the kind of housing stock yet. I

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<v Speaker 1>think that's going to appeal to the millennial generation and

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<v Speaker 1>that's where we really need to be thinking about going.

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<v Speaker 1>Percolating in London, in New York and other major cities,

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<v Speaker 1>is this hopelessness about housing. The summary seems to be

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<v Speaker 1>we've got to build up. There's got to be a

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<v Speaker 1>vertical rise. Where do we stand in this country on

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<v Speaker 1>the dichotomy between the numbers you're giving, which are a

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<v Speaker 1>fantasy to anybody living in New York and San Francisco,

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<v Speaker 1>and the need to build vertically. Are we gonna build vertically? Well,

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<v Speaker 1>vertical units are You'll see that development going right now? Um, Tom,

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<v Speaker 1>the the you know, going to Washington, d C. And

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<v Speaker 1>you're seeing you know, all of this new uh, multi

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<v Speaker 1>family construction occurring, both with condos that are for ownership

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<v Speaker 1>as well as rental. It is more higher end. So

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<v Speaker 1>we sort of break down the market based on luxury

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<v Speaker 1>market and affordable, and clearly the lean is towards the

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<v Speaker 1>upper end of the market rents and purchase price range

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<v Speaker 1>as well as the luxury and we're not we're still

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<v Speaker 1>not at the point right now where we're building affordable

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<v Speaker 1>entry level units, particularly in the high employment markets, because

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<v Speaker 1>it's these urban communities and their suburbs where you really

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<v Speaker 1>need to create the housing stocks you can recruit a

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<v Speaker 1>workforce and especially if you want to retain them. And

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<v Speaker 1>that's that's where the shortages right now. What's happening with

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<v Speaker 1>the suburbs, I mean in in big cities, certainly there's

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<v Speaker 1>a cross trend to urbanization, but I've I've read from

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<v Speaker 1>other people that people are starting to the younger generation

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<v Speaker 1>doesn't want to live in the suburbs. They don't want

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<v Speaker 1>the long commute, the traffic jams. Uh. Is that true

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<v Speaker 1>outside of the big cities like New York, Well, we

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<v Speaker 1>you know, there's been a there's been a significant policy focus,

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<v Speaker 1>particularly in this administration as well as you know, planners

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<v Speaker 1>to think about building residential housing units are places of

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<v Speaker 1>work or near mass transit um. And yeah, there's absolutely

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<v Speaker 1>no doubt that. Uh, you know, this younger generation is

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<v Speaker 1>more urbanized. We're not certain how that's going to stick

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<v Speaker 1>long term. I mean, let's be real, as as you

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<v Speaker 1>once you get married, you have children, you start making

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<v Speaker 1>your location decisions based on other factors that I don't

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<v Speaker 1>think are being considered right now. School quality of schools,

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<v Speaker 1>other activities for your kids, size of home you can

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<v Speaker 1>have to house your family. And so when people often

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<v Speaker 1>tell me, well, this generation is different than the last one,

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<v Speaker 1>the only thing we're seeing different about this generation is

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<v Speaker 1>there delaying the decision to buy till later. But other

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<v Speaker 1>than that, we see the trend line of you know,

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<v Speaker 1>the initial home might be a condo or small home

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<v Speaker 1>near near an urban location, but as they expand their families,

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<v Speaker 1>they're certainly going to venture into some of the more

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<v Speaker 1>suburban markets, which is Tom moved to the suburbs. Oh,

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<v Speaker 1>there is a good question get a dog defense. Hey,

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<v Speaker 1>you know that the reality is, well, we are seeing

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<v Speaker 1>the baby boomers who are retiring. There there's an trend

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<v Speaker 1>coming back into cities. Um, but that's a whole another discussion.

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<v Speaker 1>Yes it is, and we'll have that with you, Sird

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<v Speaker 1>another time. David Stephens, thank you. Mike Rachel from Brazil, Indiana.

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<v Speaker 1>This is out I seld I fort Rachel from Brazil, Indiana.

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<v Speaker 1>It's south, it's southwest, sort of west southwest of Indianapolis.

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<v Speaker 1>Notes that Mr Strayhan is at his final day with

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<v Speaker 1>Ms Rippa. I'm not dying. I'm not gone. Mr Strayhan suggests.

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<v Speaker 1>Rachel from Brazil, Indiana says, you know there's a slot

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<v Speaker 1>there to for the thanking. Tom Keen, thank you Rachel

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<v Speaker 1>for that email. Greatly appreciate it. It was it was valuable. Yeah,

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<v Speaker 1>we say you got congratulations. Good morning America. Mr Rippa,

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<v Speaker 1>no doubt will endure and carry forward with her excellence.

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<v Speaker 1>This hour of surveillance brought to you by Volvo Cars

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<v Speaker 1>White Planes. Visit Volvo Cars White Planes dot Com. Here

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<v Speaker 1>is Jennell Crispin. Well close, Michael Bark. I'm jumping a

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<v Speaker 1>hand your voice. I've got to severb the traffic on

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<v Speaker 1>my mind. Michael bar Please, thank you very much. Mind

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<v Speaker 1>Bernie insist that he will stay in the race for

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<v Speaker 1>the Democratic presidential nomination, and that as some party leaders concerned,

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<v Speaker 1>if you hear that that will hurt Democratic front runner

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<v Speaker 1>Hillary Clinton, especially since Donald Trump has been meeting with

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<v Speaker 1>Republican leaders who are leary of him. Trump on Fox

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<v Speaker 1>News talked about yesterday's meeting without speaker Paul Ryan. I

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<v Speaker 1>thought it was a great meeting. We had a we

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<v Speaker 1>discussed a lot of things, a lot of very important things,

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<v Speaker 1>and I thought it was really a very very good meeting.

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<v Speaker 1>I think Paul felt the same way, and everybody else did. Also.

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<v Speaker 1>A New York politician convicted of using his position as

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<v Speaker 1>sentim majority of leader to help his stunt extort hundreds

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<v Speaker 1>of thousands of dollars was sentenced to five years. Former

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<v Speaker 1>Senate Majority to leader Dan Skelos and his son Adam

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<v Speaker 1>were convicted last year of extortion, conspiracy, and bribery. Adam

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<v Speaker 1>Skelos scot six and a half years. Global News twenty

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<v Speaker 1>four hours a day, powered by our twenty four hundred

0:10:35.760 --> 0:10:39.120
<v Speaker 1>journalists more than one hundred fifty news buraus from around

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<v Speaker 1>the world. Michael bar Mica and Michael, thank you so much.

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<v Speaker 1>Greatly appreciate that. We're gonna try to get the last

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<v Speaker 1>nineteen minutes of the show accurate and correct as we wander.

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<v Speaker 1>So this Friday, we're thrilled here with us what a

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<v Speaker 1>week it has been. We'll do that, we'll wrap it up.

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<v Speaker 1>Is best weekend to get you moving into the weekend

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<v Speaker 1>and on to Monday. Bloomberg surveillance, lots going on around

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<v Speaker 1>the world, and of course a lot of news out

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<v Speaker 1>of Brazil. Gabrielle Santos from JPMorgan Asset Management joins us

0:11:11.400 --> 0:11:13.520
<v Speaker 1>next to talk about how you can play it