What are the most significant macroeconomic head winds that home builders like Pulte are facing today?
We are well into the fourth year now of the housing downturn. There are supply problems, and there are demand problems. The supply problems right now are primarily foreclosures. On the demand side, I break it down into three problems: One is consumer confidence, two is the inability to sell your existing home, and three is mortgage availability. We are slowly working on all four of those issues. Foreclosures are not abating, but they at least are [being absorbed]. About 50 percent of all resales in the last couple of months have been foreclosure sales. That’s a huge number. On the consumer confidence side, we are just beginning to see the first few stories come out about unbelievable affordability in housing. It’s a great time to buy. Mortgage rates are hitting a new low. The inability to sell your home will get taken care of when people start feeling confident about housing. And then on the mortgage availability side, thank goodness we’ve got the Federal Housing Administration program
