Housing is becoming more and more lucrative, as Richard Smith, the president and CEO of Realogy Holdings (RLGY), told CNBC on Wednesday.
He echoed sentiment by the National Association of Realtors that housing prices could increase by as much as 9 or 10 percent this year, though he told CNBC that the total housing recovery could be as much as a five-year long “correction process.”
Smith’s company, Realogy, has been recommended by CNBC’s iconic Jim Cramer, who hosts the show Mad Money. Cramer has been bullish on housing ever since famed hedge fund manager John Paulson came on his show and told him that the sector was the place to be. Cramer subsequently kept up his Buy recommendation on Realogy due to its significant exposure to the market.
Housing for Realogy has been booming, and Smith said that demand is outpacing supply, causing the spike in prices. In fact, he added that their inventory is “selling as quickly as [they] can get it.”
This trend, intuitively, has caused mortgage rates to start to rebound, especially when coupled with the Fed’s potential end to quantitative easing. Thirty-year mortgage rates reached 4.46 percent last month in what was the biggest increase since April 1987.