MBS Highway’s Barry Habib on the 2021 housing market

This week, HousingWire’s Editor in Chief Sarah Wheeler interviews MBS Highway Founder and CEO Barry Habib. In this episode, Barry Habib and Sarah Wheeler launch season 5 of the Housing News Podcast by discussing MBS Highway’s 2021 housing market forecast.

During the interview, Barry Habib also discusses mortgage rates, what a new administration means for housing and how the industry can build an empire in 2021.

Here is a small preview of the interview with Barry Habib, which has been lightly edited for length and clarity:

Sarah Wheeler: Let’s jump into rates. We’ve been talking to economists all year, and we’ve had many 2021 housing market forecasts that assumed the Senate was going to be under Republican control. So, when that didn’t happen, we got a surprise there. Now that the results are final, how did it change MBS’ forecast?

Barry Habib: Predominantly, most people were forecasting higher interest rates, but the vast majority got this completely wrong. For many years, we have fortunately been on the right side, as we’ve been forecasting low rates based upon what happens with the inflation environment. We thought technology would keep inflation low, but we also knew that debt keeps inflation low. This is a tough concept for people to understand due to the additional stimulus. You see, when we have a stimulus like this, we can anticipate for a period of time that rates will rise based upon the additional economic activity that the stimulus brings. However, when the stimulus wears off, it’s ephemeral as there is now a bill to be paid, and that bill is debt service. People often say we are just printing money, but instead, we are actually borrowing money and going into debt, which could mean we have less money in the long term for economic growth. When you have any situation like that, it slows growth. We’ve seen it every place in history, every time in history, whether it’s the US, China, Japan, Italy, France, or anywhere in the Eurozone. So, when we take a look at what we can expect, we can expect a little bit of a bump up in rates due to the initial effects of the stimulus.

The Housing News podcast explores the most important topics happening in mortgage, real estate, and fintech. Each week a new mortgage or real estate executive joins the show to add perspective to the top stories crossing HousingWire’s news desk. Hosted by Sarah Wheeler and produced by Alcynna Lloyd.