Tags: Fettke | home | prices | rising

Kathy Fettke to Moneynews: Home Prices Will Keep Rising Amid Supply Shortage

By    |   Friday, 20 Dec 2013 07:46 AM

Home prices have been on the upswing since early last year and will continue their ascent thanks to a shortfall of available homes, says Kathy Fettke, CEO of Real Wealth Network, a California-based real-estate investment club.

"We need 1.5 million new homes every year to keep up with population growth and decay of old homes, and we haven't come close to that in the past six years," she told Newsmax TV in an exclusive interview.

"For almost seven years now, it's been closer to 500,000 [new homes built]. So it's really about 6 million homes that weren't built."

Watch our exclusive video. Story continues below.



In addition to population growth, there's an estimated 3 million people who moved back in with their family during the Great Recession and are now moving out, Fettke says.

Editor's Note: Get Tom Luongo's Gold Stock Adviser — Click Here Now!

Rising rents also will drive people to buy homes, Fettke says. "Imagine a first-time homebuyer today who's seeing their rent go up every single year," she said. "They could buy a home, make their payment half of what they pay in rent today, and it's locked in. . . . In most places, it will be well worth it to buy in the long run."

All this means huge demand for homes. "So it's just simply a matter of we're behind, and builders need to get back in business," Fettke said.

"The problem is they stopped buying land. They were going broke over the past six years because they weren't building."

It takes a long time to get building permitted and land titled, Fettke explains. "So that's really where builders are at right now — trying to get back in business. They're having a hard time getting it started."

As for the Federal Reserve's decision Wednesday to start tapering its bond buying, Fettke doesn't think it will hurt home prices.

"Interest rates have been artificially low for a long time, and that will change," she said. "That has to change over time, but the Fed is not going to do this overnight. They're going to taper slowly."

So far, the Fed is cutting its bond purchases to $75 billion a month from $85 billion.

"It needs to happen. [Quantitative easing] is pretty unnecessary because our economy is ticking along," Fettke said.

She thinks stocks are in a bubble, and now might be a good time to sell them. "That's why I'm encouraging so many investors to consider real estate as an investment, because we know prices are going to continue to go up with this shortage of inventory," she said.

Meanwhile, the three-month drop in existing home sales through November will prove to be a short-term trend, Fettke says. That's because regulators have now made clear what the new rules for mortgage lending will be starting Jan. 1, Fettke says.

"Lending will get a little bit easier and that will have a huge effect on housing."

Editor's Note: Get Tom Luongo's Gold Stock Adviser — Click Here Now!






© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
Personal-Finance
Home prices have been on the upswing since early last year and will continue their ascent thanks to a shortfall of available homes, says Kathy Fettke, CEO of Real Wealth Network, a California-based real estate investment club.
Fettke,home,prices,rising
536
2013-46-20
Friday, 20 Dec 2013 07:46 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved