A contractor avail oneself ofs a hammer while working on townhouse under construction at the PulteGroup Metro housing development in Milpitas, California, Oct. 25, 2018.
David Paul Morris | Bloomberg | Getty Tropes
While Wall Street panics about falling rates, Main Street is benefiting, especially in the housing sell, according to housing guru Ivy Zelman.
She says every quarter-point cut in mortgage rates is equivalent to a 3 percent drop in the penalty of a home.
“Right now housing prices are down for the consumer more than 10%, so it makes it much more affordable,” Zelman, recounted CNBC’s Diana Olick on Wednesday. “We are seeing very good activity, especially in the low end of the market.”
Zelman is known for foretokening the 2005 housing peak and the 2012 housing bottom. She is the founder or Zelman & Associates, a research firm that studies housing market experts for institutional investors and corporate executives.
Interest rates have been falling in the U.S. and out as worries about a trade war and a global slowdown cause investors to ditch riskier plays and buy into bonds, a historically safer customers. The yield on the benchmark 10-year Treasury note was at 1.623% on Wednesday, below the 2-year yield at 1.634%, causing a key give up the fight curve inversion that sent markets tanking.
Although stock market investors are worried tumbling counts and an inverted yield curve mean recession, Zelman said home buyers are not as “laser focused” on market headlines.
“Energy street is actually doing very well. Consumers have jobs, they’re seeing wage inflation, and I evaluate overall confidence is still strong,” she said.