Wells Fargo CEO: housing prices will keep going up
Photo courtesy of Nancy Pierce
Wells Fargo chairman and CEO John Stumpf.
Wells Fargo CEO John Stumpf[6] shared an optimistic outlook on housing with CNBC, saying that it's important any changes to the government's role in financing housing not be rushed.
"We can't kill the golden goose," Stumpf said. "Housing is clearly healthier than it had been.
"Housing prices will continue going up," he predicted. "This is a bargain."
The man overseeing the bank that makes one in three U.S. mortgages [7]jumped headlong into one of the economy's greatest debates: Will housing prices continue rising?
Some are concerned that the recent lift in housing prices is being driven by Wall Street investors taking advantage of low prices to buy houses to rent them out. Others are watching to see whether first-time home buyers step in to provide ongoing home purchases.
In speaking with CNBC's anchors, Stumpf tried to put in perspective how millennials view the housing market and mortgage rates vs. older generations with painful memories of much higher rates.
"If you were born after 1980, you think 4 percent is a normal rate," he said, noting that America's prized 30-year mortgage is not available anywhere else on earth.
The fixed-rate 30-year mortgage, in which the borrower wins if rates move higher and refinances if rates fall, is such a good deal from the borrower's perspective that Wells Fargo's (NYSE: WFC) largest shareholder Warren Buffett[8] said at last month's Berkshire Hathaway[9] (NYSE: BRK.A) (NYSE: BRK.B) annual meeting that everyone should go for the 30-year mortgage.
My colleague Adam O'Daniel[10] at the Charlotte Business Journal also commended Stumpf for thinking fast on his feet during an unscripted moment, in reacting to Fed policy moves, that can be found at that newspaper's website[11].
Mark Calvey covers banking and finance for the San Francisco Business Times.
References
- ^ Mark Calvey (feeds.bizjournals.com)
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- ^ Twitter (twitter.com)
- ^ LinkedIn (www.linkedin.com)
- ^ Google+ (plus.google.com)
- ^ John Stumpf (feeds.bizjournals.com)
- ^ bank that makes one in three U.S. mortgages (www.bizjournals.com)
- ^ Warren Buffett (feeds.bizjournals.com)
- ^ Berkshire Hathaway (www.bizjournals.com)
- ^ Adam O'Daniel (feeds.bizjournals.com)
- ^ at that newspaper's website (www.bizjournals.com)