Quicken Loans CEO Jay Farner appeared on CNBC Monday and voiced optimism on the housing market, specifically how low mortgage rates are increasing the share of refinances.
“I don't see interest rates changing significantly from this point, and they don’t have to, to make sense,” he said. “I would say most of the folks out there today should think about getting a refinance because these rates are at historic lows.”
Farner added that he and his at Quicken Loans are seeing the purchase market pick up. He also said that despite recent decisions, the Fed shouldn’t be so quick to cut rates for a third time in 2019.
The Fed lowered the benchmark overnight lending rate to a target range of 1.75% to 2%. The Fed said in its policy statement that it was cutting rates “in light of the implications of global developments for the economic outlook as well as muted inflation pressures.”
“I know that purchases typically lag some of the other indicators … the housing market seems very, very strong,” Farner said. “We’re noticing that our homes value, as we measure be appraisal, is still coming in higher than how consumers perceived the perspective value of their home.”
While Farner expressed optimism on the economy and the housing market, Build Fax’s August Housing Health report revealed single-family housing authorizations have declined for the third-consecutive quarter—a key indicator of historical recessions.
Holly Tachovsky, CEO of BuildFax, said declines in single-family housing authorizations have been a “strong indicator” of recessions between 1961 and 2008.
Farner, though, noted that “all things are firing on all cylinders,” and the lack of unemployment has yet to impact employers, which he noted could have a trickle-down effect on homeownership.
When asked if he thought mortgage rates would go down, and if now is a good time to buy, Farner responded by saying, “There is no harm in exploring your opportunities and taking advantage of a low interest rate.”