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Speaker 2: Matt, I'll start with you said we haven't we haven't
Speaker 2: had this conversation a long time. We've been talking about stocks,
Speaker 2: and I think it's good timing because they saying that
Speaker 2: we're about to enter into a recession. Twenty five percent
Speaker 2: chance Goldman Sex I think said that there is a
Speaker 2: chance of a recession. So stock market has crashed relatively,
Speaker 2: but real estate is still you know, holding on right,
Speaker 2: but that it's a domino effect usually, so are we
Speaker 2: going to see a real estate correction happen in the
Speaker 2: residential real estate market? Over the next twelve months in
Speaker 2: your opinion.
Speaker 3: No, no, And I think I've said this probably one
Speaker 3: hundred times over the past two years. I do not
Speaker 3: see a crash happening. We have already been in the
Speaker 3: midst of a correction over the past eighteen months since
Speaker 3: interest rates have gone up. You know, home prices are
Speaker 3: not appreciating that twenty to thirty percent as they were
Speaker 3: during the pandemic years, but appreciation is still appreciation. If
Speaker 3: you look at the year over year numbers, home equity
Speaker 3: and homes have appreciated. You know, right now you have
Speaker 3: about eleven point five trillion dollars and tappable home equity
Speaker 3: right now in America, and that's a new high. Right now,
Speaker 3: there's thirty two million mortgage holders who can access at
Speaker 3: least one hundred k in equity right now. So the
Speaker 3: market has still the housing market has been doing a
Speaker 3: little bit more than just holding on. I think it's
Speaker 3: still going strong. You know, year over year is up
Speaker 3: over five percent nationwide. And if you look at historically
Speaker 3: over the past sixty five years, homes have appreciated on
Speaker 3: average about three and a half to four percent. So
Speaker 3: even if you look at year over year with home
Speaker 3: appreciation is still doing better than what is averaged over
Speaker 3: the last you know, sixty five years. So real estate
Speaker 3: is one of those things.
Speaker 4: It goes with the market is ebbs and flows to it.
Speaker 3: But as long as you buy right, you're going to
Speaker 3: put yourself in a good position to win.
Speaker 1: So the wind has to be built in. Well, I'm
Speaker 1: gonna come to you because Matt, that's a pretty interesting
Speaker 1: stitsm that thirty two million people can actually apply for
Speaker 1: mortgage of that amount. But well as your originating mortgage
Speaker 1: is how big or what's the delineation between saying all right,
Speaker 1: we're gonna wait for mortgage rates to come down, or
Speaker 1: we're going to act now. Right at seven and a
Speaker 1: half percent for a thirty year fixed I mean, yes,
Speaker 1: perspective is key. That's high for this generation. For other
Speaker 1: generations it's not. But as we see the market is
Speaker 1: pulling back, interest rate cuts sounded like they're going to
Speaker 1: be coming. How do you prepare people to say, yes,
Speaker 1: we're going to pull the trigger here and maybe refinanced later,
Speaker 1: or we grab here because it could go higher. We
Speaker 1: don't really understand, We don't really know where the market's going.
Speaker 5: My philosophy on this is more or less stay ready,
Speaker 5: so you don't have to get ready. It's always those
Speaker 5: when you're an investor, if it already happened, is too late.
Speaker 5: I think Ian said that right, you have to prepare
Speaker 5: and see this coming. So right now, application, as far
Speaker 5: as I'm seeing personally, they're already increasing because people are
Speaker 5: hearing the word on the street that because of the
Speaker 5: market performing negatively, it is causing interest rates to go down.
Speaker 5: So those people that have been sitting on the sidelines
Speaker 5: are now effectively jumping in. But because of that, this
Speaker 5: is what we had going on in the pandemic. When
Speaker 5: people jump in because the rates are low, we do
Speaker 5: have supply issues. So how many people are actually going
Speaker 5: to be able to take advantage of this little blip
Speaker 5: in the rates, whether it be permanent or not, because
Speaker 5: everybody needs some type of housing over their head. But
Speaker 5: I feel like the past couple of years, while rates
Speaker 5: have been high, it's been used as more of a
Speaker 5: reason to not get into the market. So application volumes
Speaker 5: are up. I think that you know, week over week,
Speaker 5: application volumes are reported through Wednesday, so next Thursday we'll
Speaker 5: hear about the last seven days. I think we're going
Speaker 5: to see those applications going up and people realizing, Ooh,
Speaker 5: I might have already missed the boat because they're down
Speaker 5: a little bit and pulling the trigger on those homes
Speaker 5: they otherwise wouldn't have prior to the last couple of days.
Speaker 4: Yeah, let me add to that real quick, MOE.
Speaker 3: Right now, the market the mortgage market rate for conventional
Speaker 3: mortgage ended today at six point three seven five percent.
Speaker 3: That's if you bind a prime at residents single family
Speaker 3: home seven sixty seven.
Speaker 4: Eighty plus credit scores. Right.
Speaker 3: But once we start seeing these FED rate cuts, which
Speaker 3: we all believe is going to start happening in September.
Speaker 3: Even though the Feds lowering the FED funds doesn't directly
Speaker 3: impact mortgage rates, I firmly believe we're going to start
Speaker 3: seeing more traction of interest rates going down as well.
Speaker 3: So once we start seeing rates in that five range,
Speaker 3: there's going to be a whole little buyers that's going
Speaker 3: to hit the market. Even with the Mooleman recession coming,
Speaker 3: you're still going to have a slow buyers that's on
Speaker 3: the slot sidelines right now that can't afford the buy
Speaker 3: but they've just been waiting and waiting for a moment
Speaker 3: like this. So for those of you who have been
Speaker 3: trying to kind of like time the market and play
Speaker 3: like double dutch, you got one foot in, one foot
Speaker 3: out type shit, like it's about to be over for you,
Speaker 3: because I personally believe home price is going to a
Speaker 3: skyrocket at that point once all these market me personally.
Speaker 5: Buying demand, your absolutely marketing.
Speaker 3: The demand is still there, right, It's still there even
Speaker 3: with rate seven eight percent. Now, once we start seeing
Speaker 3: five and a half low fives on a thirty year mortgage.
Speaker 4: Forget about it. Priced out?
Speaker 3: Yeah, people gonna get priced out, Like look at the
Speaker 3: tappable equity right, Look how many people have equity right now?
Speaker 4: So you're going to see more inventory right now?
Speaker 3: Inventory is at four point one months, right, that's still
Speaker 3: technically a seller's market. Anything above six months of inventory
Speaker 3: is a bias market, right, So.
Speaker 4: You're going to see some inventory.
Speaker 3: Are people who got all this equity now they want
Speaker 3: they have an opportunity now to trade up or downside
Speaker 3: because the rates are more favorable. It's not eight percent,
Speaker 3: it's you know what I'm saying, five percent, So they're
Speaker 3: gonna put that on the market. But it's still going
Speaker 3: to be over for a lot of people. They're going
Speaker 3: to get priced out, and there's nothing you can do
Speaker 3: about it.
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