Construction activity going on into the building market here in order for it to see some improvement in terms of the fate for borrowers basically well the current homeownership rate in the u. S. Thats at sixty three point nine percent which is obviously below the two thousand and five peak of sixty nine point two percent so is this report reason to believe that we can actually see that rate jump up a little bit. I think its possible that we could see that i think in addition there with millennium have been holding back their their home buying activity ever since the financial crisis so i think. The optimism that were seeing from Home Building as well as sort of the jump back into the market one else will bode well Going Forward for homeownership rates well as the fed is expected to have more rate hikes for two thousand and eighteen what kind of effect do you think that could have on current and also future mortgages. Well you know in terms of the fed rate hikes i think most economists would think there is about three to four of these in play for two thousand and eighteen which would be significant on Mortgage Rates if it wasnt for the fact that were talking about rate hikes that affect really the short end of the yield curve however Mortgage Rates are are really tied more to the to the intermediate part of the curve somewhere in the five to ten year range so i think what well see is continued flattening of the yield curve maybe a pickup of forty to fifty basis points point fourth point five percent increase that is in mortgage Interest Rates for the fixed rate thirty year mortgage i still think it will be a good market to be buying into if your buyer particularly a first time home buyer out there even with these kind of hikes on the horizon some people are predicting to see higher housing prices in the u. S. In two thousand and eighteen and two thousand and nineteen which is double the rate for underlying consumer inflation and wages so is that assessment only taking into account areas with higher housing costs like l. A. In new york or is this really in line with the Current Health of the Housing Market. Well i think that overall nationwide home prices should appreciate between two and a half or three percent both in two thousand and eighteen and two thousand and nineteen which would be running about parallel or maybe even a little bit higher than inflation so the numbers you were quoting me earlier probably are more reflective of some of the hotter markets the Housing Markets on the west coast in particular the san franciscos. San jose seattle those i think we can expect to see continued acceleration in home prices for the foreseeable future largely because of tightening in the Housing Inventory side on a lot of those markets freddie macs chief economist john because he wrote that an area where the Housing Markets werent prepared for a war coastal housing areas which are in danger poor rising levels do you think that we could see a now there were real estate bubble that could harm the nation or is this something that would have more of a local a fact. Well it certainly is a local fact those properties that are there on the coastal markets will certainly be affected i think some of the studies that youre the shot on is referencing there are are saying that the the these markets will be hit by a six foot rise in sea levels by the year twenty one hundred so this is not something that i think any of us have to worry about. On. A five to ten year basis even i think this is out there quite a number of years but. Certainly its an issue as you start to think about things like Flood Insurance programs that are out there. And hasnt sure as policies that are offered by Insurance Companies for for homeowners those things if we were to see a continued rise in sea levels even very small levels it might make them start to think twice but overall im not i think there are many other things about the Housing Market that we need to kind of pick closer attention to them than sea level rising in the immediate future i want to ask you now about millennial is what you sort of touched upon earlier in our interview its very well known that millennial is have quote caleb the Housing Market as they have with many other industries continue to rant morris is by far a handful of reasons a millennialist are getting older now and closer to the age that their parents bought homes for the first time so down the road how big of an impact do you think that will have on the homeownership rate. I think it will have a fairly Significant Impact if you look back from the years right after the financial crisis of two thousand and eight two thousand and nine what we saw was a lack of of formation household formation coming from. That millennial segment what that did is it really suppressed first time home buying opportunity for quite a while and historically weve seen as much as thirty forty percent of new home purchases coming from the first time home buyers of which two thirds these days are made up of millennial buyer so its a big deal i think Going Forward the fact that we have an uptick in millennial interest in becoming home buyers coupled with the next generous the thirty seven of the fifty one year olds that are also showing a bit higher. Interest in homeownership will certainly push the market along from what weve seen over the last couple years while its obviously had a pretty big impact so is there a way to offset the millennial effect on the Housing Market. In terms of what we see going on today i think there are any number of things that are you know causing headwinds for for the market and one of the biggest happens to be affordability i think if you look at that among anything in the market today we have to stand back and really assess can people spend the or have budgeted that is the amount of income for the cost of those she added with homeownership its rising as we know and many of the the large metropolitan areas largely because of a severe shortage and Housing Inventory and from that standpoint i think we really kind of have to look at what opportunities are there to kind of either promote truman and tax credits and other kinds of things to lure people into the housing sector some what weve seen in the past few years do you think the Housing Market actually created any new protections to create a safety net or prevent anything to Housing Market bubbles like with zod during the financial crisis. Yes there have been up a lot of things that have happened since the crisis four years and probably the biggest i would say is the Consumer FinancialProtection Bureau implementation of the socalled qualified mortgage rules which really dramatically changed the underwriting quality the requirements for underwriting that is of home mortgages in other words if you look at the quality of loans being done today versus ten years ago its dramatically different these are very very low risk assets again they are the nontraditional mortgages that we want saw and many would say contributed to the crisis in fact that coupled with other improvements better oversight of fannie mae and freddie mac. Even though both are in conservatorship. Along with other measures have gone a long way to really make sure that what we saw in two thousand and eight two thousand and nine very unlikely to happen again on on our watch for quite some time that theyre clippard rafi a professor of finance at the smiths will in business at the university of maryland thanks so much for your time today thank you as we go to break heres a holiday quiz question for you Real Christmas trees are grown in all fifty states of the union which states grow but most Christmas Trees will have the answer after the break. About one hundred of them i did my bit of fun thats not a cut i didnt know me money. On that im going to put. In this new school but you know me you have a much to be still slot. Machines so youll get. The. Runs out and moving to you know how to go as youll know soon enough room enough sanity to let the money local guy doing something as innocent. And the most likely none of them open submit as become a problem but. Not commit murder no one would come in the club and then the policemen. From some small town some have the most honest some solipsists and they got to. Come in the night club to learn how to live the from the one that hit. You got manmade Global Warming incinerating plan or is it causing an eco full of cuts but the corporations feel like you know what that might cost us a penny at the end of the year so we do have donek adjustment to our algorithm it will take out the city and alaska that would flag us to take action appropriate first survival of the species and were going to instead rely on our Balance Sheet and our algorithm like im going to g. P. S. Monitor in your car this pointing over a cliff theyre saying i dont care if the cliff is there a biographer says its not there so i keep driving im going to have found little ways im going to go right over the cliff because out of the data tells me. What the pope says. They put themselves on the line. They did accept the reject. So when you look at the president. Wanted. To go. This is what the three of them deeply. Interested in the war. Welcome back the answer to our quiz question Real Christmas trees are grown in all fifty states of the union which states have the most of those well the top Christmas Tree producing states are oregon North Carolina michigan pennsylvania wisconsin and Washington State more in the Christmas Tree industry and a little later now check this out from the best of boom bust. Bitcoin is still doing fairly well hovering around fifteen thousand dollars but its crypto competitors are starting to shine it to get his take on whats happening were joined now by knight chief markets analyst at think markets named bitcoin has had a pretty wild month and theres so much speculation as to why what do you think are the main reasons for the surge. Thank you for having me well there are a number of reasons as you said speculation is one of the major reason that we have seen there is that theres a major difference when it comes to big corn and assessing how this movie is happening where the coin is a commodity where the big coin is actually a currency but let me just really vine by this many of bitcoin because it is the entire concept is just decentralized and that has fueled a rally not only in bitcoin but also in the i see your market and then we have major major firms taking a stab on the Companies Like whatsapp and other things like each have is having its own platform where they wanted to introduce their we introduce their own point and they wanted to go after way you can Exchange Money through the entire platform but again coming back to your question what really fueled this rally the rally has been fueled on the basis that this is actually a drover to where you can go and store your valve and this is why we are seeing not much of a big movement to the downside but we seeing Massive Movement to the upside but the liquidity was the massive problem with the introduction of siebel c. M. E. And now nasdaq next year that liquidity gab but how could become a lot more better because we have institutional traders coming into the market and participating that remember when seba did its listing for the future the gap between the future and the spot index was over two thousand dollars that gap has narrowed because bigger institutions have started to participate in this market and with the introduction of these institutions were seeing a lot more less wallet when it comes to because and i think that is driving and that would drive the price in two thousand and eighteen as well you pointed out. In a piece that you wrote for forbes that a theory and like coin which are two of bitcoin is main rivals have done well recently to kill is that simply because of the sudden interest in crypto currency or is there Something Else at play absolutely like i said its not the only e three m. Its not only dice its not only near but other companies which are issuing their ice years like each other via also gene pool and performing very very role you look at the performance of the three m. The reason that these firms are doing so well is because of the great in the technology that they have got how many transactions can you execute per second i think that is where everyone is looking at everyone is looking at what is the next quarry which is going to seed this must so ron like bitcoin thats why investors and capital is still traded the are trying to capitalize on this market theyre trying to find what is the next big point what is the next court which is going to drive this massive rally look at look at your report a look at the performance for the last four this year some of these coins have performed march on washington better than bitcoin in two thousand and seventeen bitcoins were eyes in december took a lot of people by surprise and it led to plenty of crypto currency critics to say that this is a risky bubble waiting to happen do you think there were a i mean what do you think we can expect for a bit coin for the rest of this year and in twenty eighteen yes while some of those skeptical though some of those biggest listen the people who are not that favorable in terms of a big point turn out to be holding the Biggest Holdings of bitcoin the physical holdings of bitcoin so lets just remind our viewers that that was the premature case and theyre going to provide the Brokerage Services to the main media or to what they call a sophisticated clients so what do we think holds for bitcoin in two thousand and seventeen. In my articles in force before the c c board did its future listing we said theres a good chance is that big coin price could easily touch twenty thousand so we are near enough that twenty thousand by the end of this year but i think going into two thousand and eighteen there are a number of factors which are very important and that could easily drive the price of bitcoin value above forty thousand what are those factors lets look at regulation because we know the throughout two thousand and seventy regulations havent been able to pull back bitcoin in terms of is priced or how much price we have a change is how many new machines is were going to get what different products we are going to get if theres going to be any Technology Upgrade for because of how the brokerage and hedge fund and issue sions are going to react within this one because the more participation that we have from these ones and i will be writing an article on forbes about this the more liquidity we have and the more liquidity we have and the more regulation in terms of her credibility we have we will see even more participation from the general public but one thing above all is that if the perception continues that this is a derivative way you store was driver to have to store your valve then i do think that the price the book tension for the prices for forty thousand perhaps by the end of two thousand and eighteen but if the perception changes the point is no longer a driver to where you can store or a commodity it is actually a currency and alternative to the Mighty Dollar then perhaps the upside for that isnt that much because then the volatility needs to see the volatility need to die out i also since you are in london i want to pivot and talk about bracks and now members of parliament are set to vote on whether or not to put an official date. Im putting that into law do you think theyre going to vote for that but i think the breadstick negotiation will remain the major major obstacle for the u. K. s economy in going to thousand and eighteen and i think to some a house done after the sighting in toronto she has done a tremendous job in terms of bringing where the breaks it started from and where we are we have gone through she has gone through a major obstacle such as Northern Ireland such as establishing stable grounds in terms of how much theyre going to pay for the bill i think these are the major obstacle in order to start that negotiation where she would be able to go into the room and start ok who is going to be my trade partner and who will be how were going to negotiate these trade deals i think she is on the right track but doesnt necessarily mean that every year doesnt necessarily mean that two thousand and eighteen by any mean is going to be good for the u. K. Economy or even in two thousand and nineteen yes she certainly had a rocky road ahead and has dealt with a lot but earlier this month samuel tombs of pantheon macro economics who predicted the outcome of the last general election said he things might not actually happen primarily because of whoever is in power at that point what want to risk damaging their own reputation by implementing it do you think that scenario is possible i do think that some are is theres a probability for that and im sure if you see some sort of betting companies out there could be still provide bets on the zones that ok the breaks it could actually not happen after all of this drama that we have seen but i think the probabilities or the reality of that situation happening are very minute. The e. U. Has gone through a lot over the past especially when it comes to elections so what do you think will be the blocks Biggest Issue to face in two thousand and eighteen. I think the Biggest Issues going into two thousand and eighteen would be once again you geo political conce