We Have an Undersupply Issue in Housing: Taylor

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Dec. 4 (Bloomberg) -- Jeffrey Taylor, co-founder of Digital Risk, discusses the state of the U.S. housing market and mortgage lending with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

U.s.. thank you for coming on.

How much weight do you give one months worth of a tech?

It was probably two months worth of data.

We had the government shutdown and then having september and october come out, what we really saw was this huge reduction and anticipation and more often normalized number in october.

That gives you that 24% jump.

No concern given the government shutdown?

Because the refinance dropped off in may, we had the big numbers in october.

I saw that, too.

60%. what happened?

For people who could not refinance, i think interest rates ticked up a little bit.

I will take a step that and see if i can get a better rate.

Much more than anticipated.

Prices for new homes fell in october.

They were down 4.5%. the prices have declined slightly over the past 12 months.

Is this an oversupply issue?

Wax wherever little bit of an undersupply issue.

You look at 10 million households.

It will have equity.

Then you have tightening inventories right now.

We have a situation right now where we are looking for new supply to come to the marketplace.

Mortgage rates.

Latest average on a fixed loan, 4.29%. still at historic lows.

Does nearly a percentage point higher.

What is the state of mortgage lending right now?

Are buyers stilts get it even with rates this low?

-- skittish even with rates this low?

30 years, we've never seen anything like this.

Buyers, if you're going to buy a house, and get it.

Get into the house and the mortgage market.

The big thing coming up is all going to be about the cost of compliance.

Whether you are a small and there are a large lender.

How do i comply with all frank.

The ability to pay.

Speaking of which, there is a lot of pressure to relax lending standards.

That is an effort to boost loan volume.

Fannie and freddie are tightening their credit standards.

What is the end result?

We are in a market that is 95% government driven.

The markets will start to loosen . private capital will start to come in.

The price will be higher interest rates but more credit will be available to more people.

And use a loosen the underwriting guidelines, that has its good parts and it's bad parts, doesn't it?

You don't want to go to the point where we were a few years ago, as some people said, if you could walk and chew gum at the same time you could get a mortgage even if you did not i. we were so far to the left and now we are so far to the right.

The average score is 750 these days.

People can afford to pay for the houses that they want.

I think it is just coming back elizabeth smart to the left.

We will be good for the housing market.

There are even spent include property evaluation errors and income the statements.

How prevalent are these?

We are seeing quite a bit right now.

Right now, they are not cost necessarily by buybacks but these defects overtime could evolve to be more serious.

How do they differ from mortgage fraud?

It is somebody was no intent to live in the house.

They're basically buying and selling for profit.

These defects or someone trying to do a good alone but the appraisal was wrong, the income was misstated, etc.. when do we get back to a healthy pace of home sales?

When are we going to get back to that?

I think this next year we will see a market of around 800 -- adding 2015 we could be there.

Is that contingent on jobs?

We get that all-important jobs number tomorrow.

Is that contingent on people getting back to work?

It is.

On friday, excuse me.

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

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