Housing and New Home Sales Analysis, BusinessTalk Radio Network, 10/28/04

Date: October 28, 2004
Date: October 28, 2004
Station: Business Talk

DAVID WEIS, Anchor:

Let's take a look right now at the housing industry and new home sales, the figures came out yesterday….Bob Moulton, good friend and a frequent contributor to BusinessTalk This Morning, founder who heads up Americana Mortgage…

David: Bob Moulton, welcome back!

Bob: Good morning, David. Thank you for having me.

David: How are you feeling this morning?

Bob: Very good, thanks. How are you?

David: Fine. Stayed up late enough to watch something that we probably won't see again until 2090.

Bob: I don't know if I'll be around then, David. I was watching it and I knew they were going, they had the momentum with them last night as they have in the last seven games. Congratulations to the Red Sox and hopefully they will do it again in another 86 years.

David: Exactly…You and I both big Yankees fans. We should wear shirts that say "Once in every 86 years, like clockwork!"

Bob: Exactly (laughs)

David: On to some other things

Bob: The lunar eclipse

David: Right, exactly, which we had one in the Northeast. Good viewing it last night as well. So the pace of new home sales, an unexpected gain in September, we had existing home sales that came out for September just a few days ago as well. What does it tell you?

Bob: It tells me that the housing market is still very strong. I mean, the sales are still fueled by 30 year mortgage rates that are below 6% and it's boosting the economy right now and as long as the rates stay low, the housing market will remain very strong.

David: Yeah, it's all about interest rates certainly but with rising energy prices and that very possibly could take a toll on retail holiday sales along with so many other things, prices escalating at the pump, could this in any way affect home sales?

Bob: Last night, I was with some new home buyers and they're going into contract to buy a house. Interestingly enough, they're looking at delaying their closing which is the first time I had a first time home buyer looking to delay the closing and I asked them why and he said "I don't want to start paying the heating bills so soon"

David: How about that?

Bob: So I am starting to see a direct correlation between the oil prices and home purchases. I don't know what the long term effect will be but I am going to keep my ear to the ground.

David: Yeah, you know this could lead some who are looking for a home to really investigate "Oh, are you heating with oil or gas or maybe I'll go with a wood burning stove or kerosene. I mean, it could be some different options here and some different things to consider as well.

Bob: Absolutely, particularly in the Northeast where we've had some harsh winters over the last couple of years. So I think it will affect home sales in the next couple of years depending on where the oil prices stay.

David: Home sales existing or new home sales. Strong across the country or still getting pockets where it's very hot and others where it has cooled off a bit?

Bob: The West was a little off and the new home sales last month. Strong areas were in the South and the Northeast. The South was not that affected by the hurricanes we had in September. We had record rain in Georgia and in Florida but the new home sales were still very strong.

David: And seasonally? This time of year, do you see a lot of action? I know a lot of folks prefer if you have your choice to move during in the summer months so that you wouldn't disrupt your kids in school and such. But right now, does it matter when you are looking?

Bob: It seems to be coming less seasonable than it was ten or fifteen years ago and it seems like things seemed to have flattened out over time. People are really looking for the right buy and the right market at the right price and if they can get that, they'll buy either in September or June or even January, whenever is best for them and if the numbers work for them. So we are seeing less seasonality than we had years ago.

David: Bob Moulton, founder of Americana Mortgage who checks in with us every time we get these figures out. Existing home sales and new home sales both of which were rather healthy for the month of September. Bob, be well, take care and thanks so much.

Bob: Thank you very much. Have a good day.

David: You too! BusinessTalk This Morning for Thursday. It's fourteen past the hour.