Hovnanian CEO Says Housing’s Biggest Problem is Psychological

By CNBC.com

CNBC.com
| 27 Jul 2007 | 12:16 PM ET

Hovnanian Enterprises Chief Executive Ara Hovnanian told CNBC Friday that
the housing market’s biggest problem is pyschological.
"It’s a psychological problem right now, more than anything else," Hovnanian
said on CNBC’s "Squawk Box." "Job growth is good. Interest rates are still
really, really good. Demographics are good so it will come around."
"We’ve been through these cycles many, many times before," he continued.
"When it’s bad everybody thinks it’s going to be bad forever, and that’s
not the case. It is going to come around."
Hovnanian doesn’t expect a rapid recovery in the immediate future because
the housing market remains "challenging."
He said the public home builders are a good barometer of the market’s
health.
"The group’s sales have been down probably 20% to 25%, so (housing) starts
should follow that kind of number, compared to last year," Hovnanian said.
Although Hovnanian expects credit-challenged would-be homebuyers are having
a harder time getting a mortgage, that’s only a small segment of the market,
he said. For others, "it’s business as usual."
"My guess is things will slowly start to stabilize soon – but stabilization
doesn’t mean recovery," he said.
© 2007 CNBC.com
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