Century 21 President and CEO Michael Miedler argued on Monday that the real estate market is not “ready to taper right now” and will continue to move in a “fast direction” amid pent-up demand.
Miedler told “Mornings with Maria” that the market is still currently hot because “a lot of buyers are trying to rush in and beat any more increases in the mortgage rate.”
He made the comments on “Mornings with Maria” shortly before it was revealed that existing-home sales rose 0.8% in October from the month before to a seasonally adjusted annual rate of 6.34 million, marking two straight months of growth, according to the National Association of realtors.
The association also noted that the median existing-home sales price increased 13.1% compared to the same time last year to $353,900 and that inventory of unsold homes decreased 12% to 1.25 million, which is equivalent to nearly 2 and a half months of the monthly sales pace.
NAR’s chief economist Lawrence Yun said in a news release that Monday’s data proves that “home sales remain resilient, despite low inventory and increasing affordability challenges.”
Miedler agreed with that sentiment on Monday telling host Maria Bartiromo that he continues “to see the market moving in a very kind of fast direction as folks have a lot of pent-up demand in trying to buy homes here in this country.”
Lawrence also noted in Monday’s news release that “inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”
Earlier this month it was revealed, U.S. consumer prices accelerated at the fastest annual pace in more than 30 years as supply chain bottlenecks and materials shortages persisted.
The consumer price index climbed 6.2% year over year in October, the Labor Department said. The increase marked the largest annual gain since November 1990. Prices rose 0.9% month over month.
The cost of shelter ticked up 0.5% last month and was 3.5% above year-ago levels.
Miedler also pointed out on Monday that “on the building front, we are way behind.”
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“From the downturn that happened in 2008 to where we are at now, we are at historic lows on where folks are building,” he told Bartiromo.
“Here is the truth of the matter; Between 2012 and 2021 there were close to 12 million new household formations and we only put 7 million homes built in this country so we have to double the pace in the next five years to catch up with the demand that’s out there,” he argued.
However, that may prove to be difficult if supply chain disruptions linger. Earlier this month, the National Association of Home Builders CEO Jerry Howard noted that those bottlenecks are creating unprecedented issues, telling “Varney & Co.” they are causing “unusual circumstances” as it pertains to new homes.
Howard acknowledged that the issues are not impacting sentiment, but did stress that the “supply chain is still a headwind.”
He also told host Stuart Varney that “demand is so strong and the supply is so low” for new homes and argued if the supply chain can get “fixed” some “real good years” for the market are ahead.
Howard offered insight into the industry on the same day it was revealed homebuilder confidence rose in November as low inventories and strong buyer demand helped boost confidence despite the ongoing supply chain disruptions.
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The National Association of Home Builders/Wells Fargo Housing Market Index this month rose three points to 83. Analysts surveyed by Refinitiv were expecting homebuilder sentiment to hold at 80.
The index can range between 0 and 100 with any print over 50 indicating positive sentiment. Any reading above 80 signals strong demand.
Miedler told Bartiromo that currently “all the regions across the marketplace” are seeing an increase in new construction, but noted that there is “a hot market in the south” where there is “a little bit more building” taking place in cities including Raleigh and Wilmington, North Carolina as well as Jacksonville, Florida and parts of Texas.
FOX Business’ Jonathan Garber contributed to this report.