1
00:00:01,920 --> 00:00:05,760
Speaker 1: This is taking Stock with pim Box and Kathleen has

2
00:00:05,760 --> 00:00:09,799
Speaker 1: on Bloomberg Radio. The Reserve starts at two day policy

3
00:00:09,880 --> 00:00:14,080
Speaker 1: meeting today with some very important economic reports on the table.

4
00:00:14,560 --> 00:00:16,799
Speaker 1: New home sales in the United States jumping to their

5
00:00:16,880 --> 00:00:21,360
Speaker 1: highest level since February two eight, consumer confidence holding steady,

6
00:00:21,800 --> 00:00:24,919
Speaker 1: suggesting the consumer may continue to spend just enough to

7
00:00:25,000 --> 00:00:27,920
Speaker 1: keep the economy growing healthily and maybe even to buy

8
00:00:27,920 --> 00:00:30,280
Speaker 1: some new homes along the way. Joining us now here

9
00:00:30,280 --> 00:00:33,280
Speaker 1: in studio Lynn Franco, Director of Economic Indicators at the

10
00:00:33,280 --> 00:00:36,839
Speaker 1: Conference Board. They put out the monthly Consumer Competence Report,

11
00:00:36,880 --> 00:00:39,879
Speaker 1: and Spenda Goodell, she's chief economist at Zello you know

12
00:00:40,040 --> 00:00:44,159
Speaker 1: them well, online housing market based in Seattle, Washington. She

13
00:00:44,240 --> 00:00:46,360
Speaker 1: too is in studio today, so we welcome you both.

14
00:00:46,680 --> 00:00:51,160
Speaker 1: Thank you. Thanks. So let's start with you. Consumer confidence nothing,

15
00:00:51,200 --> 00:00:53,440
Speaker 1: you know, a little wiggle here and there, but pretty

16
00:00:53,479 --> 00:00:57,240
Speaker 1: much holding steady last month. Yes, it's sort of nothing gained,

17
00:00:57,320 --> 00:00:59,600
Speaker 1: nothing lost, I think is the theme this month. We

18
00:00:59,720 --> 00:01:02,080
Speaker 1: did a little bit of an optic in the present situation,

19
00:01:02,160 --> 00:01:05,759
Speaker 1: so we know that the economy continues chugging along and

20
00:01:06,080 --> 00:01:09,399
Speaker 1: looking ahead. Consumers are cautiously optimistic, as they have been

21
00:01:09,440 --> 00:01:12,800
Speaker 1: now for quite some time. I gotta ask you about

22
00:01:12,840 --> 00:01:15,640
Speaker 1: housing because I was just looking at the list of

23
00:01:15,680 --> 00:01:19,360
Speaker 1: all the different metropolitan areas and the median days on

24
00:01:19,400 --> 00:01:21,360
Speaker 1: the markets. Off you're trying to sell a house or

25
00:01:21,400 --> 00:01:24,280
Speaker 1: buy a house, you can maybe I don't know, a

26
00:01:24,360 --> 00:01:27,880
Speaker 1: hundred and three days in the Miami Fort Lauderdale area,

27
00:01:28,080 --> 00:01:31,320
Speaker 1: but if you go to San Francisco only forty three days,

28
00:01:31,360 --> 00:01:34,560
Speaker 1: tell us about that, well, it shows how fast the

29
00:01:34,880 --> 00:01:36,760
Speaker 1: market is moving in a lot of these areas. If

30
00:01:36,800 --> 00:01:40,240
Speaker 1: you think about, you know, San Francisco taking forty five days,

31
00:01:40,600 --> 00:01:43,240
Speaker 1: you know an average to to move home, you're really

32
00:01:43,560 --> 00:01:46,440
Speaker 1: going pending after a week or a few days on

33
00:01:46,480 --> 00:01:48,240
Speaker 1: the market, and the rest of the time you're under

34
00:01:48,240 --> 00:01:51,640
Speaker 1: contract and you actually have to go through closing, And uh,

35
00:01:51,720 --> 00:01:54,880
Speaker 1: it just shows that it's an incredibly competitive market. It's

36
00:01:54,920 --> 00:01:57,480
Speaker 1: a market where people are moving fast, and some places

37
00:01:57,520 --> 00:01:59,880
Speaker 1: are moving much faster than others. Of course, but over

38
00:02:00,000 --> 00:02:04,120
Speaker 1: all we've seen, you know, nationally, the days on market

39
00:02:04,160 --> 00:02:08,000
Speaker 1: come down quite significantly. So uh, I want to ask

40
00:02:08,040 --> 00:02:12,160
Speaker 1: you Lynn Franco Conference Board Consumer Confidence. You ask about

41
00:02:12,160 --> 00:02:14,480
Speaker 1: the labor market. Of course, jobs plentiful, hard to get.

42
00:02:14,800 --> 00:02:17,919
Speaker 1: You ask about incomes are they going to grow, etcetera.

43
00:02:18,520 --> 00:02:24,040
Speaker 1: No specific questions about housing except for plans to buy homes.

44
00:02:24,080 --> 00:02:26,520
Speaker 1: How much do you think it feeds into consumer confidence

45
00:02:26,560 --> 00:02:31,120
Speaker 1: If prices are rising as they've done, not not roaring

46
00:02:31,240 --> 00:02:34,160
Speaker 1: in the caseular home price report, but continuing to rise

47
00:02:34,200 --> 00:02:37,840
Speaker 1: and seeing you know, the demand for homes getting stronger, well,

48
00:02:37,880 --> 00:02:40,600
Speaker 1: I think in terms of your portfolio, that's always a plus.

49
00:02:40,680 --> 00:02:42,760
Speaker 1: And we've actually seen a little bit of an uptick

50
00:02:42,840 --> 00:02:45,639
Speaker 1: now and people saying that they intend to purchase a home.

51
00:02:46,000 --> 00:02:48,400
Speaker 1: On average, it's not as strong as we saw probably

52
00:02:48,400 --> 00:02:51,359
Speaker 1: at the beginning of but it does seem to sort

53
00:02:51,400 --> 00:02:53,639
Speaker 1: of be curving upward. And I think that feeds into

54
00:02:53,639 --> 00:02:55,480
Speaker 1: a lot of the housing data that we've seen over

55
00:02:55,520 --> 00:02:59,000
Speaker 1: the past several days. Well, continuing the housing thing, spen

56
00:02:59,520 --> 00:03:02,800
Speaker 1: just looking at Boston, for example, seventy one days on

57
00:03:02,840 --> 00:03:06,840
Speaker 1: the market, uh, the June Zillo Home Value Index saying

58
00:03:06,880 --> 00:03:12,480
Speaker 1: that a house in Boston and ninety four thousand dollars.

59
00:03:12,280 --> 00:03:13,880
Speaker 1: It's it's right, it's a it's getting up there. And

60
00:03:13,919 --> 00:03:15,600
Speaker 1: that's for the metro. If you actually look at the city,

61
00:03:15,600 --> 00:03:18,000
Speaker 1: it's gonna be much higher than that. And I think, uh,

62
00:03:18,360 --> 00:03:21,720
Speaker 1: you know, people are confident in housing. They think, you know,

63
00:03:21,760 --> 00:03:25,120
Speaker 1: it's the market is doing much better. And so when

64
00:03:25,160 --> 00:03:26,760
Speaker 1: you look at the decision of you know, should I

65
00:03:26,800 --> 00:03:29,160
Speaker 1: keep renting should I buy? I think a lot of

66
00:03:29,160 --> 00:03:31,240
Speaker 1: people want to buy because it's actually a good time

67
00:03:31,280 --> 00:03:34,680
Speaker 1: to invest in that home purchase. However, a lot of

68
00:03:34,720 --> 00:03:38,400
Speaker 1: people are experiencing roadblocks along the way. They either are

69
00:03:38,440 --> 00:03:40,480
Speaker 1: having a hard time saving for a down payment, not

70
00:03:40,520 --> 00:03:43,680
Speaker 1: getting a mortgage. But the biggest problem is actually finding

71
00:03:43,720 --> 00:03:46,960
Speaker 1: homes to buy. And uh you the good news this

72
00:03:46,960 --> 00:03:49,200
Speaker 1: this this morning with new home sales coming out. We've

73
00:03:49,200 --> 00:03:51,280
Speaker 1: got a few more of those sitting around now for

74
00:03:51,280 --> 00:03:56,480
Speaker 1: for sale. But overall, inventories across the country are relatively restricted,

75
00:03:56,600 --> 00:03:58,960
Speaker 1: especially when you're looking at entry level homes. Yeah, a

76
00:03:59,000 --> 00:04:00,680
Speaker 1: lot of people are priced out the market. We have

77
00:04:01,240 --> 00:04:03,720
Speaker 1: a mortgage brokers, a regular guests on the show, like

78
00:04:03,720 --> 00:04:06,280
Speaker 1: three quarters of potential home buyers. And if you look

79
00:04:06,320 --> 00:04:08,440
Speaker 1: at California broadly, if you get off the coast, can't

80
00:04:08,480 --> 00:04:12,200
Speaker 1: afford to buy a home. Incomes, uh Lyn Franco when

81
00:04:12,280 --> 00:04:15,960
Speaker 1: that's another another important part of the consumer confidence report.

82
00:04:17,360 --> 00:04:19,320
Speaker 1: If incomes aren't going to grow very much, it seems

83
00:04:19,320 --> 00:04:22,239
Speaker 1: it would feed into this issue with housing. But maybe

84
00:04:22,320 --> 00:04:24,159
Speaker 1: the good thing is that prices are up and incomes

85
00:04:24,160 --> 00:04:27,480
Speaker 1: are growing that fast, we'll we'll see some stabilization in

86
00:04:27,520 --> 00:04:29,960
Speaker 1: the housing market, because if you don't make enough money,

87
00:04:30,160 --> 00:04:32,880
Speaker 1: your paycheck doesn't grow, you can't afford a more expensive house, right.

88
00:04:32,920 --> 00:04:34,680
Speaker 1: And I think we're also seeing sort of a little

89
00:04:34,680 --> 00:04:37,000
Speaker 1: bit of a divide in terms of the consumers. Those

90
00:04:37,040 --> 00:04:39,880
Speaker 1: at the lower end earning less, are not as confident

91
00:04:39,920 --> 00:04:41,960
Speaker 1: as those at the higher end, and I think we're

92
00:04:42,000 --> 00:04:45,359
Speaker 1: seeing that also impacts housing, uh, you know, decisions and

93
00:04:45,400 --> 00:04:48,480
Speaker 1: who the buyers are. So until we begin to see

94
00:04:48,520 --> 00:04:50,600
Speaker 1: I guess a little bit more sort of robust wage

95
00:04:50,600 --> 00:04:53,360
Speaker 1: growth at the lower end, I think these are buyers

96
00:04:53,360 --> 00:04:56,440
Speaker 1: that will potentially remain on the sidelines. And that actually

97
00:04:56,480 --> 00:04:59,839
Speaker 1: is a really interesting point because we're seeing affordability being

98
00:05:00,080 --> 00:05:01,440
Speaker 1: much more of an issue at the low end of

99
00:05:01,480 --> 00:05:04,039
Speaker 1: the market where wages haven't grown as much, whereas at

100
00:05:04,040 --> 00:05:06,280
Speaker 1: the high end of the market affordability isn't isn't an

101
00:05:06,279 --> 00:05:08,919
Speaker 1: issue at all. What accounts for this lack of supplies?

102
00:05:09,000 --> 00:05:11,480
Speaker 1: Ven you you know, it depends on the market, but

103
00:05:12,000 --> 00:05:14,960
Speaker 1: you know, some some markets are seeing still negative equity

104
00:05:14,960 --> 00:05:17,440
Speaker 1: problems where homeowners are still underwater where they owe more

105
00:05:17,440 --> 00:05:19,760
Speaker 1: in the mortgage than what the house is worth. Um.

106
00:05:19,800 --> 00:05:23,719
Speaker 1: But you know, for the fast moving markets like San Francisco, Seattle, Denver,

107
00:05:23,920 --> 00:05:26,880
Speaker 1: l a negative equity is not really a sticking point anymore.

108
00:05:26,880 --> 00:05:29,000
Speaker 1: It's the fact that we're not building quite as much

109
00:05:29,320 --> 00:05:32,880
Speaker 1: as we probably should be building to supply enough inventory.

110
00:05:33,000 --> 00:05:35,640
Speaker 1: And we have a bit of a musical chairs problem

111
00:05:35,680 --> 00:05:38,400
Speaker 1: going on where sellers don't want to sell despite it

112
00:05:38,440 --> 00:05:40,480
Speaker 1: being a very good seller's market, because they don't want

113
00:05:40,480 --> 00:05:42,880
Speaker 1: to become buyers. Quick final question de Len frankly a

114
00:05:42,960 --> 00:05:45,440
Speaker 1: good five seconds. Is consumer confidence enough to support a

115
00:05:45,480 --> 00:05:48,440
Speaker 1: FED rate hike? Now? I think we're not going to

116
00:05:48,480 --> 00:05:50,880
Speaker 1: see a FED right how until probably the end of

117
00:05:50,880 --> 00:05:54,640
Speaker 1: this year early next year. Thank you very much, Lynn Franco,

118
00:05:55,000 --> 00:05:59,320
Speaker 1: director of Economic Indicators at the conference Board. We've got

119
00:05:59,360 --> 00:06:03,320
Speaker 1: more with Enya Goodell, chief economist for Zillah. They're based

120
00:06:03,360 --> 00:06:07,000
Speaker 1: in Seattle. This is taking Stock. I'm pim Fox my

121
00:06:07,120 --> 00:06:12,640
Speaker 1: co host Kathleen Hayes. This is Bloomberg. H