10% Housing Appreciation Not the New Normal: Meyer

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Dec. 6 (Bloomberg) -- Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch and Bloomberg political analyst Matthew Dowd discuss the economic impact of the U.S. housing market on Bloomberg Television’s “Bloomberg Surveillance.”

I think this will mark the strongest year for many years.

This year.

We're on track for just over 10%. that is not the new normal.

We will see moderation from here on.

Prices are affected by exceptional factors.

Those are now coming down.

Distressed properties were very attractive to investors that bought.

An extremely low inventory.

The market needs to normalize again.

This dovetails into the cautious call on growth.

Looking at the fourth quarter, you nailed it.

Are you more optimistic for 2014? we can finally say yes.

We are a bit more optimistic.

Still cautious, but looking for a better year in terms of growth.

Think about the dynamics.

Considerable fiscal constraints.

We're going to see environment -- it will allow for the underlying economy to look stronger.

The bloomberg political analyst is with us -- sequestration in 2014 is different for him last year.

They realize -- both sides realize they made a huge mistake.

An interesting point to me, we had a stock market high.

We have housing rates out.

We have more millionaires and billionaires.

You have all of this data and then you have 75% of the country saying we are on the wrong track.

Will that look like going forward when you deal with the restructuring of fannie and freddie?

Will we see tightening standards and will that hurt the economy even more?

I think that is one of the challenges.

There are lasting scars.

We will continue to see regulatory changes and adjustments.

One of those is in the mortgage market.

Can i get a mortgage in 2014? doesn't change the radically that i cannot the mortgage?

We could see some listening, but when we look back, it will look fundamentally different than what we had during the bubble.

Let's look at today's jobs report.

There is angst across the nations.

To me, it is labor.

Is there any chance of paychecks rising?

So far, it has been sluggish.

There is a lot of underutilization of labor.

It will take time before you start to see wage pressure builds.

We are making progress.

Firing is down.

We are starting to see a pickup in hiring.

There is a brewing of frustration in the country.

For a generation, they have basically see no increase.

Now, they do not trust our economic institutions.

The do not trust our governmental institutions.

They have got no fix.

We are looking at the top one percent for housing in the top one percent for wage earners.

This is undoubtedly the case.

There's a lot of frustration of low income growth and market conditions.

Yet, we have created wealth.

Where has that been created?

It is the stock market.

I want to bring us to washington.

Does this distill down to a republican senate?

You take the economic analysis, and does it lead to the angst that you're talking about?

The problem is, the country will take it out on both sides.

You will see some republican senators when.

I still think that the odds are that the democrats will keep the senate.

The republicans will keep the house by a bear margin.

Neither party is benefiting.

Back to the economy, once we start tapering, does that balance itself out?

I think so.

That is the return to what will be a more normal economy.

But, it will be a difficult process.

I do not think anyone can argue that tapering will be easier.

Yes, we will return to an environment of high rates eventually.

We will return to an environment where the economy is lower.

This the income gap start narrowing then?

Presumably.

What does your economic team learned from the bond prices of july and august?

That was ugly.

What did you learn from that?

I think that the communication is going to be absolutely critical and very difficult.

Teasing janet yellen will be different?

Yes.

I do not think she will be all that different.

She headed up the communications committee.

I think we will continue to see effort to make it obvious to the markets what the mandate is and what they're trying to do.

Ultimately, it will be difficult because this is unprecedented.

The jobs report will come out at 8:30 this morning.

What is the first thing you look for?

Headline jobs first, then revisions, then the unemployment rate.

Finally, what drives the and and limit rate?

Are wages going up?

That is all i want to know.

That is coming up at 8:30. also, we are going into ebay.

The ceo will be joining us later on today at 1:00. ebay is our twitter question of the day.

What is your ebay strategy?

Are you a seller or a buyer.

Do you wait until the last minute to make your purchase?

Tweet us.

This text has been automatically generated. It may not be 100% accurate.

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