About Charles Young
In an April 2023 appearance on CNBC's "Squawk on the Street," Invitation Homes CEO Dallas Tanner discussed the state of the housing market. He stated that single-family homes have "held up really well" and that the average household and consumer remain strong, noting that 83% of U.S. mortgages are below 5% and 63% are below 4%. Tanner described the "lock-in effect" as "real," saying it is suppressing transactions as homeowners choose to stay put. He characterized the market as "certainly a challenging market from a supply perspective."
Tanner expressed support for California, calling it "one of the greatest economies in the world," but identified supply constraints as "the villain" in housing affordability. He argued that while federal policy can help, "we need the local levels to approve more housing" and noted that "as local municipalities get smarter around how to work with developers and builders you see supply come online."
Source: AI-verified profile updated from Charles Young's recent appearances.
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Transcript (4 segments)
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Interviewer0:11
Joining us this morning, Dallas Tanner. Great to have you. Your own shares are back to the highs of the year pretty much. There is a budding discussion about maybe a rolling recession in real estate, moving into commercial but out of single family. Is that how it feels?
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Dallas Tanner0:26
You know, it's interesting. Single families held up really well, all things being equal. Feels like we've had rolling bits of bad news starting in tech and working to commercial real estate. At the end of the day, if you look at the average household and consumer, still strong. I think more importantly, you mentioned the mortgage application data. What's interesting, you still have 83% of mortgages in the U.S. sub 5%, and 63% of mortgages are sub 4%. So I believe that price handcuffs for those who benefit from low mortgage rates are suppressing their willingness to list, which puts the onus on the builders.
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Interviewer1:19
You're spot on. The lock-in effect is real in terms of people trying to balance out that decision for what they want to do. To your point on the builders, if the 30-year fixed rate is in the low 6s, and the conversations we're having, they're able to buy down the mortgage rates to high 4s, low 5s. That's a compelling argument for somebody that wants to own a home. It's creating less transaction, no doubt about it. If you look at the data out there on new listings on a year-over-year basis, much less. Company, a number of analysts at least weighing in with questions about California in particular, somewhat important market. Regulation there in terms of rents, what we may see there. Seattle also increased scrutiny over rent growth. Is that a concern for you? Would you swap out exposure in California for another region if you could?
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Dallas Tanner2:30
We love California. It's one of the greatest economies in the world, quite frankly. There's no doubt that housing policy is becoming something that is more at the forefront in terms of both, you know, questions around affordability. But really, the pressures here, the villain in all this is supply. In California, much like some other states in the country, is supply constraint. And it's not just the California issue. Housing, getting more housing supply in the local marketplace, that creates pressures. As local municipalities get smarter around how to work with developers and builders, you see supply come. There's other markets that do it well. So that is going.
