David Lykken: What the future looks like for home sales

by MPA23 May 2014

Over the past few weeks, we've received a lot of dismal news in the mortgage industry about slowing economic growth. For the everyday lender going to work and trying to make a living, it can be quite disheartening. We could use some good news every now and then. Well, it turns out we've got some...


MBA chief economist Michael Fratantoni reports that new home sales are on the rise. A greater than 10% increase is expected in 2014 over 2013 for new home sales, versus an expectation of no growth (and possibly some decline) in existing home sales. 


While existing home sales comprise a greater percentage of home sales, new home sales contribute more to GDP. When new construction occurs, more pieces of the economy begin to move. More people are able to get to work and build wealth. As a result, more people in the future will be able to buy homes. 


In other words, new home sales seem like a small fraction of the economy today, but they are a great indicator of a robust economy for tomorrow. While we would like to see existing home sales making the same numbers, it is a good sign that new home sales are growing as rapidly as they are. It gives us hope that there are good things in store for the future. And sometimes a little bit of hope is all we need.


David Lykken is 40-year industry veteran who has been an owner operator of three mortgage banking companies and a software company. As co-founder and Managing Partner of Mortgage Banking Solutions, David consults on virtually all aspects of mortgage banking with special emphasis executive leadership development, corporate strategic direction and implementation as well as mergers & acquisitions. A regular contributor on CNBC and Fox Business News, David also hosts a successful weekly radio program called “Lykken On Lending” (www.LykkenOnLending.com) that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals. Recently he started producing a 1-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper websites daily across America.



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