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Speaker 1: Hey, ba fam, Welcome back to Brown Ambition. This is

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Speaker 1: a very special episode like to call the Baqa where

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Speaker 1: we take your questions and try to offer some answers.

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Speaker 1: And usually I will qualify that by saying answers with

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Speaker 1: like a lowercase A.

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Speaker 2: Please don't assume me. You'll know I'm not your financial planner,

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Speaker 2: not your investment adviser. You're definitely not your real estate

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Speaker 2: agent or your attorney.

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Speaker 1: So you know, just here posting the show for ten

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Speaker 1: years talking to some badass brown women about their finances

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Speaker 1: in their career. But I am joined today by someone

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Speaker 1: who is a bit of an expert in her field,

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Speaker 1: probably at the top of her field. And it's not

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Speaker 1: every day you just talk to a bad ass brown

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Speaker 1: woman who is in economics and working at one of

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Speaker 1: the largest real estate I don't know technology firms in

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Speaker 1: the country, but I am.

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Speaker 2: Very honored to be joined today by Darryl Fairweather. She

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Speaker 2: is a chief economist at Redfinn and she's here to

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Speaker 2: talk to us and hopefully help us, like bring a

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Speaker 2: little bit of sanity and under standing to what is

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Speaker 2: actually happening in the US housing market right now.

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Speaker 1: So Darryl, thank you so much. For joining me on

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Speaker 1: broad ambition.

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Speaker 3: Thank you so much for having me. I'm delighted to

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Speaker 3: be here.

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Speaker 2: So tell us a little bit about what you do

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Speaker 2: at Redfin? What does one as a chief economist, and

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Speaker 2: especially in your particular cime, you said you focus a

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Speaker 2: lot on behavioral economics. So what are you up to

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Speaker 2: over there at Redfin?

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Speaker 3: Yes, I study the housing market. We have so much

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Speaker 3: great data that I have access to at Redfin, data

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Speaker 3: about the housing market, and I connect that to the

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Speaker 3: broader economy and also to the decisions that our customers

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Speaker 3: make when they're buying or selling homes. I have a

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Speaker 3: team or we have a team of economists that analyzes data,

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Speaker 3: we put out research reports, and then I go and

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Speaker 3: communicate that research out to the broader public so that

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Speaker 3: people feel more confident when they're making a decision about

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Speaker 3: whethery're to buy or sell or rent, that they have

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Speaker 3: all the information that they need about how to make that.

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Speaker 2: Decision for themselves. O p' a perfect person to talk to.

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Speaker 2: So what's actually happening on? What's going on? I'm stressed.

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Speaker 2: I told you a little bit about my and I

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Speaker 2: think a lot of the A listeners like I was saying,

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Speaker 2: a lot of us own homes, and we were first

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Speaker 2: time home buyers, got a little lucky. Our audience is

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Speaker 2: that elder millennial audience, you know, where some of the

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Speaker 2: ones who if you were lucky you got a house

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Speaker 2: before everything kind of went nuts post pandemic, when rates

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Speaker 2: were going up and housing affordability became such an issue.

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Speaker 1: And I think I'm definitely in that camp of a

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Speaker 1: homeowner who is who's like, yeah, it's.

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Speaker 2: Great to have. It's a good problem to have. But

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Speaker 2: I'm feeling really stuck. I live in such an expensive

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Speaker 2: market in New York, and you know, I have my

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Speaker 2: little house.

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Speaker 1: And a cute little rate, but we're looking to got

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Speaker 1: I got two kids, want I want a bigger house,

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Speaker 1: some more space, and it just doesn't seem feasible. Like

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Speaker 1: I think, housing prices in my neighborhood are up fifty

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Speaker 1: percent from when I bought my house six years ago,

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Speaker 1: which is like, yay for me, I'm such a genius.

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Speaker 1: They're very lucky. But at the same time, if I

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Speaker 1: sell it for that, I have to go buy a

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Speaker 1: bigger house, which is going to be even more you

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Speaker 1: know what I mean. So can you help me feel

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Speaker 1: less insane. Is that just like, is that what you're

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Speaker 1: seeing in your data?

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Speaker 3: That's exactly what we're seeing in the data. There are

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Speaker 3: record low amount of sales happening right now. There was

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Speaker 3: this boom in sales that happened during the pandemic because

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Speaker 3: of how low mortgage rates were. Everybody who could buy

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Speaker 3: a home did buy a home, and everyone who already

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Speaker 3: had a home they refinanced their mortgage and got a

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Speaker 3: record low rate. Now, after that, we saw mortgage rates increase.

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Speaker 3: And normally, when mortgage rates increase, that means that there

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Speaker 3: are fewer home buyers out there, and that means that

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Speaker 3: sellers have to lower their prices to meet home buyers

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Speaker 3: where they're at. But that did not happen because homeowners

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Speaker 3: would rather just stay where they are with their really

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Speaker 3: cheap mortgages than sell at a lower price than what

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Speaker 3: they are hoping to get. And if you're in that

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Speaker 3: position where you want to upgrade, or you want to

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Speaker 3: even just move across town, maybe you got a new

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Speaker 3: job and you want a shorter commute, it's really to

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Speaker 3: do that because of how much higher mortgage rates are.

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Speaker 3: You'd have to give up that cheap mortgage rate. Three

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Speaker 3: percent perhaps and get a much higher rate. Right now,

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Speaker 3: thirty year fixed rates are at about six and a

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Speaker 3: half percent, and that could mean hundreds, if not thousands

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Speaker 3: of dollars more each month you would have to pay

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Speaker 3: just for a lateral move. So many people are saying, no,

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Speaker 3: that's not worth it. I'm just going to stay where

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Speaker 3: I am. Some people are deciding to move, and they're

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Speaker 3: finding this work around where they rent out the home

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Speaker 3: or they have the cheap mortgage and then they decide

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Speaker 3: to rent their next home instead of doing the whole

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Speaker 3: selling and buying thing again. But that can be pretty complicated.

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Speaker 3: I think a lot of people just feel stuck, like

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Speaker 3: they're just gonna, you know, stay where they are because

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Speaker 3: it's better than facing this really expensive market.

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Speaker 2: Am I holding myself back by feeling stuck? Am I

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Speaker 2: actually stuck?

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Speaker 1: Is it a bad decision to go and buy the

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Speaker 1: one point five million dollar house that I'd have to

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Speaker 1: That's like what you would have to have a budget

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Speaker 1: for to get the size house I'm thinking about in

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Speaker 1: my in New York?

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Speaker 2: But that to me is just so astronomically expensive. Am

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Speaker 2: I holding myself back? Is it as scary as I'm

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Speaker 2: making it? Out to be at our rates as scary

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Speaker 2: as they've seem.

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Speaker 3: Well, there's definitely a real financial reason why people are

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Speaker 3: deciding to stay because of that rate difference, but there

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Speaker 3: are also some psychological reasons why people aren't moving. One

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Speaker 3: is that the economy is just really uncertain, and a

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Speaker 3: lot of people don't want to sign up for an

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Speaker 3: expensive mortgage when they feel like their job might not

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Speaker 3: be as secure as it was a couple of years ago.

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Speaker 3: Another thing that might be at play is the status

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Speaker 3: quo bias people feel. People tend to just stick with

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Speaker 3: what they are doing because doing something new is scary

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Speaker 3: and uncertain, and that keeps people in the status quo

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Speaker 3: even when they might have something better waiting for them.

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Speaker 3: And then another thing that might be happening is that

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Speaker 3: people might not feel comfortable stepping down from home ownership.

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Speaker 3: The housing market, yes, it's very expensive, if you look

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Speaker 3: at the rental market, it's actually more affordable right now.

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Speaker 3: For the first time since the Great Recession, we saw

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Speaker 3: and decrease in the number of homeowner households, and at

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Speaker 3: the same time there was an increase in renter households.

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Speaker 3: Because if you're comparing apples to apples, say a one

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Speaker 3: bedroom condo to a one bedroom apartment. It's very obvious

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Speaker 3: that the apartment is going to be cheaper to rent

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Speaker 3: than the condo is to buy. But a lot of

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Speaker 3: people when they bought, they bought single family homes, and

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Speaker 3: there just aren't that many single family homes available to rent,

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Speaker 3: so it's harder to make that transition from homeowner to renter.

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Speaker 3: And then also you're losing that status as a homeowner.

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Speaker 3: So there might be more options out there than maybe

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Speaker 3: you're considering. But maybe those options, you know, they're too

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Speaker 3: big of a change for you to give up the

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Speaker 3: home that you're in.

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Speaker 2: Yeah, I mean, I just had a guest on, a

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Speaker 2: couple of guests on this week. They're best friends of

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Speaker 2: twenty years, two women, they each have children. They had

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Speaker 2: come out from each getting divorces and decided, listen, we're

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Speaker 2: just going to pull our finances together, move and buy

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Speaker 2: a house together. And one of the reasons they're in

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Speaker 2: the DC area.

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Speaker 1: One of their reasons was the the homes that they

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Speaker 1: were looking at were like to rent, like to rent

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Speaker 1: for them. For the size home they were looking for,

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Speaker 1: it actually worked out to be a little bit more

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Speaker 1: economical to purchase a house. But you're saying that in

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Speaker 1: some areas, is this like nationwide that renting has become

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Speaker 1: a little bit more affordable than buying in a lot

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Speaker 1: of areas. Is that nationwide or are there like pockets

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Speaker 1: where that's happening.

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Speaker 3: It's pretty much true nationwide. I think the only exceptions

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Speaker 3: were Detroit in Houston, where it's still more affordable to

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Speaker 3: buy than it is to rent. The reason why renting

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Speaker 3: is more affordable is because the rent, like when someone

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Speaker 3: is renting out an apartment, they're not really considering what

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Speaker 3: their mortgage is like, just trying to get somebody to

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Speaker 3: rent that out, so the price is much more flexible.

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Speaker 3: But homeowners and home sellers have been really they've been

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Speaker 3: really sticky about their prices. They're not willing to accept less.

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Speaker 3: And that might go back to this bias where people

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Speaker 3: tend to value something that they owned more because it's theirs,

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Speaker 3: and I think that's one reason homeowners are willing to

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Speaker 3: lower their price. We're actually seeing homeowners delist their properties

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Speaker 3: or choose not to sell at all instead of lowering

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Speaker 3: their prices.

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Speaker 2: Or you're just hoping to get more and more so

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Speaker 2: you can afford that next step up? Yes, are you

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Speaker 2: still seeing as many people moving to less expensive markets

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Speaker 2: at a time like this? And I wonder if that's

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Speaker 2: changed since there's been this year. I think twenty twenty

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Speaker 2: five was we were already heading there, but it was

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Speaker 2: definitely the year of the return to office orders. So

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Speaker 2: a lot of folks are now you know, I know,

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Speaker 2: before during the pandemic, you could move to a lower

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Speaker 2: cost area and buy a house and whatnot. Now it's

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Speaker 2: getting more challenging. But is that still Are you still

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Speaker 2: seeing Americans packing up and moving in pursuit of more

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Speaker 2: affordable housing.

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Speaker 3: That still happens, but in general, fewer people are moving

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Speaker 3: at all. And that goes back to the fixedness of

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Speaker 3: the housing market, where people are stuck where they are

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Speaker 3: because of that luck and effect from mortgages. But it

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Speaker 3: also has to do with the fewer firms are hiring.

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Speaker 3: Employers are hanging on to the employees they have and

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Speaker 3: not opening up new roles. And one big motivator for

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Speaker 3: people to move is that they have some new job

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Speaker 3: opportunity where they have an income that's at least better

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Speaker 3: relative to the cost of living. So we're not seeing

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Speaker 3: as many people move period right now, we have heard

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Speaker 3: anecdotes about people having to return to office, like somebody

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Speaker 3: who bought a home and say Boise, Idaho back during

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Speaker 3: the pandemic and then getting called back to the office

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Speaker 3: in San Jose. San Jose is the most expensive housing

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Speaker 3: market in the country, and if you move left that

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Speaker 3: area to go somewhere cheaper, and you're trying to move

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Speaker 3: back and it can be very difficult to re enter

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Speaker 3: into the housing market. So some of those people are

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Speaker 3: choosing to rent instead. Yeah, I mean, I think there's a.

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Speaker 2: Lot of people who I mean I talked to them

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Speaker 2: all the time where they'll get that return to office order.

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Speaker 2: And for me, it's kind of like a.

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Speaker 1: Soft way of laying off people. We didn't lay people off.

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Speaker 1: We just told everybody they got to come back to

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Speaker 1: the office. And for all the reasons you just laid out,

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Speaker 1: it's just not financially feasible. It's so expensive to move. Okay,

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Speaker 1: So rate wise, I mean, the FED just reduced rates

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Speaker 1: by a quarter of a percentage point, right that was

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Speaker 1: not that long ago.

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Speaker 2: Do we how long until we'll start to see mortgage

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Speaker 2: rates respond? Like when is it going to get a

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Speaker 2: tiny bit more affordable or are we going to see

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Speaker 2: any changes.

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Speaker 3: You think, Well, mortgage rates actually came down before that

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Speaker 3: FED meeting because investors in the market knew that that

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Speaker 3: rate cut was coming and people who purchased mortgage backed

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Speaker 3: securities already reacted, and that allowed mortgage.

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Speaker 2: Rates to fall.

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Speaker 3: So mortgage rates are at lows compared to the last

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Speaker 3: three or so years, but they're still very far off

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Speaker 3: from those pandemic levels. There was a point where we

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Speaker 3: had above seven percent rates for a thirty year fixed

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Speaker 3: rate mortgage, and now it's down to six point five,

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Speaker 3: six point four or six point three. It kind of

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Speaker 3: bounces around. We anticipate that next year rates will continue

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Speaker 3: to fall because I mean, the hope is that inflation

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Speaker 3: becomes us so the problem there are also some worrisome

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Speaker 3: signs in the labor market that unemployment is ticking up,

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Speaker 3: and that would mean that the FED would have to

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Speaker 3: cut again. So margag rates will probably be lower next year,

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Speaker 3: but it's definitely not a guarantee. I mean, we forecasted

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Speaker 3: that last year and it just didn't happen because we

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Speaker 3: got the tariffs instead. So anything could really happen in

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Speaker 3: this economy.

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Speaker 2: Heyba fam we're going to take a quick break, pay

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Speaker 2: some bills, and we'll be right back. Yeah. And I

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Speaker 2: mean it's not just the rates that are you know,

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Speaker 2: even if they're going up a little bit, they're still

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Speaker 2: expensive relative to where they were a few years ago.

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Speaker 2: But it's like everything else that goes into home ownership

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Speaker 2: is getting more expensive. Furniture, Like, we need a new couch.

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Speaker 2: It's about seven years and we had two kids, a dog.

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Speaker 2: Our couch was rough. We had to get rid of it.

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Speaker 2: And we're looking at prices and they're just three thousand

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Speaker 2: dollars for a regular couch. And that could be partially

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Speaker 2: to do with like tariffs if you have these couches

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Speaker 2: being made overseas and the cost of supplies to do

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Speaker 2: any upgrades. Has your data reflected any changes in how

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Speaker 2: homeowners are, Like, are we holding back from you know,

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Speaker 2: doing renovation upgrades or upgrading our furniture and everything else

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Speaker 2: that goes into home ownership is that being impacted as well?

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Speaker 3: You're right that the cost associated with home ownership have

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Speaker 3: been going up. The cost of home maintenance has been

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Speaker 3: going up, the cost of insurance has been going up,

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Speaker 3: especially in places that are prone to climate change. Like

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Speaker 3: wildfire prone places in California or floodplone prone places in Florida.

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Speaker 3: So yeah, these hidden costs are starting to creep up

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Speaker 3: and up. One way that people get money for those

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Speaker 3: costs is that they might refinance their mortgage, get a

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Speaker 3: second mortgage, get a heelock. But rates also impact how

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Speaker 3: affordable is to take money out of your home. So

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Speaker 3: if you bought your home during the pandemic or before

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Speaker 3: the pandemic, chances are you have a lot of equity

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Speaker 3: in your home. But people aren't really willing to tap

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Speaker 3: that equity at these high rates because they're having to

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Speaker 3: spend more money just to get their equity out, and

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Speaker 3: people would rather just waigh for rates to come down.

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Speaker 3: So people might be delaying these kinds of expenses. Yeah,

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Speaker 3: one hundred percent people, I am people.

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Speaker 2: What advice do you have for someone who is maybe

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Speaker 2: a first time home buyer wants to get into the

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Speaker 2: market and is just not sure if this is the

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Speaker 2: right time to buy.

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Speaker 3: I think the first step is to figure out what

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Speaker 3: can you afford? So that means looking at your budget

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Speaker 3: and seeing how much of your income you would have

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Speaker 3: to spend on housing and does that make sense given

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Speaker 3: the type of home that you want to buy. If

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Speaker 3: you can actually afford that mortgage, great, You're going to

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Speaker 3: actually have a really easy time in this housing market.

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Speaker 3: Because there are so few buyers. There are more listings

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Speaker 3: than there were a year ago. Sellers are a bit

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Speaker 3: more willing to come down in price. We're seeing that

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Speaker 3: the sale to list ratio, which is how much home

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Speaker 3: self or relative to their list price, has been coming down.

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Speaker 3: Sellers aren't willing to budge all that much because, like

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Speaker 3: I said, they still have this option of staying in

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Speaker 3: their homes and keeping their mortgage rate. If you look

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Speaker 3: at new construction, that's where we'll that's where you'll see

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Speaker 3: the most deals. New construction tends to be more expensive

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Speaker 3: than the existing homes because they're brand new, but builders

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Speaker 3: are a lot more willing to negotiate. They might even

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Speaker 3: give you a deal on an interest rate or give

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Speaker 3: you cash at closing. So if you can afford that

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Speaker 3: new construction, you'll actually have a pretty easy time getting

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Speaker 3: a good deal on it.

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Speaker 1: I'm literally out my window right now, this behemoth of

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Speaker 1: a new construction house that my neighbor you used to

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Speaker 1: be an empty lot next to me for years and

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Speaker 1: we're like, oh, it's so nice, we have some space.

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Speaker 1: Didn't realize it was just a lot waiting to be sold.

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Speaker 1: And yet mega house next to me, which just looks

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Speaker 1: so hilarious in this neighborhood that's slowly being gentrified.

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Speaker 2: I live in a largely middle income, middle class Black

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Speaker 2: and Latino neighborhood. It's kind of a gem and a rarity.

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Speaker 1: And where I live outside of Manhattan and Westchester, which

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Speaker 1: is kind of known for like the land of the

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Speaker 1: Clintons and you know, the upper middle class elite. You

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Speaker 1: leave Manhattan and you want a family, you want some space,

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Speaker 1: you moved to Westchester, and my neighborhood is just such

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Speaker 1: a I don't know. I don't want it to become

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Speaker 1: a relic, but I'm wondering how have these trends in

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Speaker 1: the housing market impacted neighborhoods like mine, where, you know,

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Speaker 1: thirty forty years ago, a middle income Black or Latino

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Speaker 1: family could move and you know, really build some equity

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Speaker 1: and build some you know, start their home ownership journey here.

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Speaker 3: Well, one thing that could help with that is if

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Speaker 3: that lot specifically, instead of it being developed into it

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Speaker 3: sounds like a McMansion, like a giant single family home,

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Speaker 3: if it was allowed to be developed into smaller homes

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Speaker 3: like perhaps rowhouses where you can fit more than one

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Speaker 3: home on the same lot, but they're really close together,

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Speaker 3: or a duplex or a triplex. That can lower the

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Speaker 3: entry point for somebody who wants to buy into the neighborhood.

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Speaker 3: If we just allow for more dense housing. Not everybody needs,

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Speaker 3: you know, a three thousand square foot home with a

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Speaker 3: front yard and a backyard. A lot of times people

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Speaker 3: just want access to what the neighborhood has to offer,

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Speaker 3: whether that be schools, or amenities or job opportunities. So

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Speaker 3: if we allow for more affordable types of homes to

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Speaker 3: be built when they're newly built, that can kind of

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Speaker 3: alleviate that problem. But just being these really expensive homes

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Speaker 3: that only really wealthy people can afford.

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Speaker 2: Yeah, and then so much of what dictates what can

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Speaker 2: be built and where that has to do with your

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Speaker 2: local governments, right, Like you're my thinking about the town hall,

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Speaker 2: the not the board of education.

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Speaker 1: But like these local you know, local municipalities, they can

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Speaker 1: they decide who can build and wear right, they're the

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Speaker 1: ones approving permits and approving what type of housing do

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Speaker 1: y'all do any analysis of, like our local governments making

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Speaker 1: any changes to allow for more affordable housing to be built.

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Speaker 3: Yes, so you've identified a very big problem, which is

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Speaker 3: local control of housing. It is these local planning boards

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Speaker 3: that usually consist of existing homeowners in the neighborhood deciding

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Speaker 3: what housing is allowed to be built. And the problem

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Speaker 3: with that is is that the only voices that tend

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Speaker 3: to be heard are people who are already pretty well situated.

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Speaker 3: They already own homes, maybe they bought those homes, you know,

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Speaker 3: decades ago when not everybody had access to these neighborhoods

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Speaker 3: or access to credit, and they're the ones deciding who

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Speaker 3: gets to become a first time home buyer. The voices

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Speaker 3: of people who want to move into the neighborhood, or

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Speaker 3: the voices of young people who want to be able

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Speaker 3: to afford a home one day are not heard when

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Speaker 3: you just have this local control. So what we're seeing

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Speaker 3: nationwide is more of a move towards state control of housing.

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Speaker 3: In California, they have allowed for any single family home

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Speaker 3: to have two additional dwelling units built on it, so

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Speaker 3: that essentially can turn a single family home into a triplex.

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Speaker 3: You could put grainy flat and adu additional dwelling unit

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Speaker 3: in the backyard and then like another suite inside the

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Speaker 3: home and allow for just more housing to be built

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Speaker 3: on what would have only allowed for one family before.

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Speaker 3: And we've seen legislation to allow for more condos, more

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Speaker 3: missing middle housing they call it like townhomes and other

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Speaker 3: states like it really doesn't it doesn't fit the normal

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Speaker 3: left right spectrum. We're seeing this in California, Montana, Florida, Texas.

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Speaker 3: We've seen a lot of progress recently, but there's definitely

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Speaker 3: more progress that needs to happen.

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Speaker 1: Yeah, I think I've seen that play out in my

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Speaker 1: area because we're close to a city.

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Speaker 2: Which is of course more diverse as it tends to be.

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Speaker 2: And then I'm like on the in between where the

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Speaker 2: city kind of begins and where the more like where

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Speaker 2: it gets a lot wider and wealthier, And you're not

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Speaker 2: seeing affordable or more condos and multiplexes being built here,

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Speaker 2: But if you just go a mile down the road

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Speaker 2: closer to downtown, you are seeing like a lot of

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Speaker 2: condos being built up. And you're right, I mean, these

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Speaker 2: Westchester are elite. They are the loudest and the most

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Speaker 2: present they're available at these random times when these meetings

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Speaker 2: are happening to use their voices. But yeah, it is

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Speaker 2: a good you know, in terms of like feeling helpless

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Speaker 2: and like how what do we even do in this

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Speaker 2: kind of economy. It's like one thing is actually go

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Speaker 2: to those meetings, try to get organized in your community

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Speaker 2: and show up and electificial who are for more affordable housing. Yeah,

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Speaker 2: it's it's it's tough. I also think property taxes, my god,

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Speaker 2: like I'm thinking about you know, one of the as

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Speaker 2: like you mentioned, you know, when you were able to

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Speaker 2: buy your home a while back, and you can build

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Speaker 2: up a lot of equityay, but in a place every

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Speaker 2: year we get a letter from our our town and

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Speaker 2: it's like, congratulations, you have your home is worth fifty

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Speaker 2: thousand more dollars and by the way, we're going to

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Speaker 2: raise your taxes even more.

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Speaker 1: And I mean, it's getting to the point now where

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Speaker 1: my property taxes are inching up to be half the cost.

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Speaker 2: Of my mortgage. And it to me that is one

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Speaker 2: of the most crippling parts of home ownership right now.

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Speaker 2: It seems a little out of my control. Any advice

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Speaker 2: for homeowners who are feeling that pinchip like property tax

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Speaker 2: assessments and how much more expensive it could make home ownership.

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Speaker 3: Yeah, so property taxes can be one of these hidden

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Speaker 3: costs that people don't really think about. When people buy

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Speaker 3: a home, they think, great, my house and costs are fixed,

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Speaker 3: I don't have to worry about my rent going up

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Speaker 3: every single year. But in many parts of the country,

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Speaker 3: your propery taxes might be large and they might increase.

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Speaker 2: One of the things to be.

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Speaker 3: Aware of about how propery taxes work is that your

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Speaker 3: local government needs to fund itself, right, It needs to

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Speaker 3: fund schools, it needs to fund local infrastructure, and they

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Speaker 3: are allowed to use property taxes to fund that. Usually

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Speaker 3: they can't tap into like income taxes, which are more

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Speaker 3: going to the state into the federal government. The more

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Speaker 3: homes that are allowed to be built in a municipality,

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Speaker 3: the larger the base is that they can spread those

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Speaker 3: costs across. So a lot of times homeowners they think

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Speaker 3: that like, if there are more homes built, that's going

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Speaker 3: to be bad for them because it will reduce their

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Speaker 3: property values. But the more homes that are built, the

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Speaker 3: more that the local government can be efficient with how

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Speaker 3: they raise tax revenue. They can spread that tax base

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Speaker 3: across more households, and that can actually make it your

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Speaker 3: property taxes don't go up as much as they would

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Speaker 3: have if there wasn't as much housing being built. So

439
00:21:06,920 --> 00:21:09,440
Speaker 3: I guess my advice, though, on a more individual level,

440
00:21:09,600 --> 00:21:13,040
Speaker 3: is to plan for those property taxes to go up.

441
00:21:13,600 --> 00:21:15,959
Speaker 3: And if you live in a place where you are

442
00:21:16,320 --> 00:21:19,520
Speaker 3: allowed to develop your property, and there are some people

443
00:21:19,600 --> 00:21:21,639
Speaker 3: who are are like kind of house hacking in a

444
00:21:21,680 --> 00:21:24,639
Speaker 3: way where they're renting out that additional dwelling in it

445
00:21:24,760 --> 00:21:27,080
Speaker 3: that they built, and that can be supplemental income that

446
00:21:27,200 --> 00:21:29,359
Speaker 3: can help offset some of those property taxes. I know

447
00:21:29,440 --> 00:21:32,040
Speaker 3: that's a big burden, but if you're really entrepreneurial and

448
00:21:32,080 --> 00:21:33,560
Speaker 3: you want to figure out how you can make the

449
00:21:33,680 --> 00:21:35,760
Speaker 3: most out of the property you own, you can actually

450
00:21:35,840 --> 00:21:38,400
Speaker 3: make your property something that is income generating.

451
00:21:40,359 --> 00:21:42,960
Speaker 2: Heyba fam, we're going to take a quick break, pay

452
00:21:43,040 --> 00:21:46,720
Speaker 2: some bills, and we'll be right back. So I want

453
00:21:46,760 --> 00:21:49,879
Speaker 2: to talk about women of color in particular, and you know,

454
00:21:50,040 --> 00:21:52,360
Speaker 2: just you know our audience, Like I said, larger women

455
00:21:52,440 --> 00:21:55,760
Speaker 2: of color and a job market like this where even

456
00:21:55,800 --> 00:21:58,960
Speaker 2: if you are lucky enough to have a stable quote

457
00:21:59,040 --> 00:22:01,320
Speaker 2: unquote job right now, you may not be seeing your

458
00:22:01,359 --> 00:22:06,600
Speaker 2: wages increase as much, and at the same time, because

459
00:22:06,640 --> 00:22:08,239
Speaker 2: of the low inventory.

460
00:22:07,760 --> 00:22:09,959
Speaker 1: That we have with housing that's still going on right,

461
00:22:10,560 --> 00:22:12,959
Speaker 1: it can feel really limiting and like you're looking at

462
00:22:13,000 --> 00:22:14,480
Speaker 1: the market and you're wondering, like, how are we gon

463
00:22:14,560 --> 00:22:16,399
Speaker 1: to be able to afford anything? I want to start

464
00:22:17,119 --> 00:22:21,080
Speaker 1: building a nest egg. Are there any programs or organizations

465
00:22:21,240 --> 00:22:24,119
Speaker 1: that could help, you know, make that pathway to home

466
00:22:24,160 --> 00:22:25,800
Speaker 1: ownership a little bit easier on us.

467
00:22:26,200 --> 00:22:29,200
Speaker 3: These programs tend to be very local, like usually it's

468
00:22:29,240 --> 00:22:31,719
Speaker 3: a state program or even a city program where they

469
00:22:31,800 --> 00:22:36,800
Speaker 3: have down payment assistance. There's also programs run by the

470
00:22:37,119 --> 00:22:40,680
Speaker 3: federal government where you can get a mortgage with a

471
00:22:40,880 --> 00:22:44,000
Speaker 3: reduced down payment, and there are some programs where people

472
00:22:44,000 --> 00:22:46,600
Speaker 3: who want to fix up their homes. There are special

473
00:22:46,680 --> 00:22:50,120
Speaker 3: lending programs that the federal government has through Freddie Mack

474
00:22:50,160 --> 00:22:53,239
Speaker 3: and Fanny May where you can get loans, especially if

475
00:22:53,280 --> 00:22:56,720
Speaker 3: you are in a lower income band. There are also

476
00:22:56,800 --> 00:22:58,240
Speaker 3: and this is kind I mean, this is maybe for

477
00:22:58,280 --> 00:23:00,440
Speaker 3: people who live in more rural areas, but there's some

478
00:23:00,560 --> 00:23:04,639
Speaker 3: interesting programs run by USDA for homesteaders who want to

479
00:23:05,240 --> 00:23:10,000
Speaker 3: buy land that they live on and grow something agricultural there.

480
00:23:10,200 --> 00:23:12,760
Speaker 3: So that's just like an unknown program where you can

481
00:23:12,800 --> 00:23:17,120
Speaker 3: get actually pretty good benefits through that. So just throwing

482
00:23:17,160 --> 00:23:19,639
Speaker 3: that out there if anybody wants to start homesteading.

483
00:23:21,320 --> 00:23:22,880
Speaker 2: It's a big thing on TikTok.

484
00:23:23,000 --> 00:23:27,360
Speaker 3: Yeah, it is. And there's specifically ones for black farmers too.

485
00:23:27,480 --> 00:23:29,879
Speaker 3: So that's why for for brown people, I feel like

486
00:23:29,960 --> 00:23:31,600
Speaker 3: that's something that they might not have ever thought about.

487
00:23:33,200 --> 00:23:35,680
Speaker 2: Okay, Yeah, I think it's just the manner of like

488
00:23:36,080 --> 00:23:38,800
Speaker 2: looking at the local level and asking and looking for

489
00:23:38,880 --> 00:23:39,760
Speaker 2: that kind of support.

490
00:23:40,160 --> 00:23:43,480
Speaker 1: Yeah, So what else is, like, what do you what

491
00:23:43,560 --> 00:23:45,920
Speaker 1: are the biggest fact we've talked about. We've talked about jobs,

492
00:23:45,960 --> 00:23:49,159
Speaker 1: We've talked about tariffs, talked about the FED. Are there

493
00:23:49,240 --> 00:23:53,119
Speaker 1: any other outside forces that can explain the kind of

494
00:23:53,200 --> 00:23:55,639
Speaker 1: predicament that we're in housing wise right now that we

495
00:23:55,760 --> 00:23:56,359
Speaker 1: haven't touched on.

496
00:23:56,920 --> 00:24:00,920
Speaker 3: Well, we're in a stagflationary econ name, which is a

497
00:24:01,000 --> 00:24:04,560
Speaker 3: fancy economics term that means that things are getting more

498
00:24:04,600 --> 00:24:06,960
Speaker 3: expensive at the same time that it's getting harder to

499
00:24:07,000 --> 00:24:10,480
Speaker 3: find a job. Normally you only get one or the other,

500
00:24:10,680 --> 00:24:13,320
Speaker 3: like the economy is either too hot and you have inflation,

501
00:24:13,480 --> 00:24:16,400
Speaker 3: kind of like we had post pandemic or the economy

502
00:24:16,520 --> 00:24:18,720
Speaker 3: is just in the gutter like we had during the

503
00:24:18,720 --> 00:24:21,360
Speaker 3: Great Recession, and nobody can find a job. But when

504
00:24:21,400 --> 00:24:23,520
Speaker 3: you have both problems at the same time, it's just

505
00:24:23,640 --> 00:24:25,800
Speaker 3: this there's like nowhere to go. There's something that the

506
00:24:25,840 --> 00:24:28,520
Speaker 3: Fed can really do because they can't lower interest rates

507
00:24:28,600 --> 00:24:30,600
Speaker 3: too much because that would mean prices would go up,

508
00:24:31,200 --> 00:24:34,400
Speaker 3: and they can't increase interest rates to fight inflation because

509
00:24:34,440 --> 00:24:36,639
Speaker 3: that would mean that the labor market would get worse.

510
00:24:37,520 --> 00:24:40,159
Speaker 3: So if you're feeling like this economy just kind of sucks,

511
00:24:40,520 --> 00:24:44,280
Speaker 3: it is because of stagflation, and stagflation really goes back

512
00:24:44,280 --> 00:24:49,040
Speaker 3: to tariff's. Tariffs make goods more expensive and it also

513
00:24:49,200 --> 00:24:53,320
Speaker 3: reduces the capacity for firms to produce those goods, which

514
00:24:53,400 --> 00:24:57,119
Speaker 3: hurts both prices and it hurts employment. So if you

515
00:24:57,119 --> 00:24:59,280
Speaker 3: want to blame something, I guess you can blame the tariffs.

516
00:24:59,560 --> 00:25:02,960
Speaker 3: There is there's some more challenges for the economy, like

517
00:25:02,960 --> 00:25:07,199
Speaker 3: what's happening with immigration. About a third of construction workers

518
00:25:07,320 --> 00:25:11,040
Speaker 3: are immigrants, and if we are not allowing those people

519
00:25:11,080 --> 00:25:12,600
Speaker 3: to come into the country or staying in the country,

520
00:25:12,600 --> 00:25:15,159
Speaker 3: and that can really hold back new construction. New construction

521
00:25:15,240 --> 00:25:16,920
Speaker 3: isn't doing so well right now anyway, just because of

522
00:25:16,960 --> 00:25:19,520
Speaker 3: how high interest rates are. But that could be another

523
00:25:20,160 --> 00:25:23,400
Speaker 3: stagflationary force on the housing market moving forward.

524
00:25:23,800 --> 00:25:27,120
Speaker 2: Yeah, and that all comes back to we're not building more.

525
00:25:27,200 --> 00:25:29,879
Speaker 1: I mean there was that number. I mean it's been

526
00:25:29,880 --> 00:25:31,679
Speaker 1: a couple of years now, I think, but four million.

527
00:25:31,720 --> 00:25:33,480
Speaker 1: We have some kind of crow and shortage of about

528
00:25:33,480 --> 00:25:36,720
Speaker 1: four million has that budget all or making any progress

529
00:25:36,760 --> 00:25:37,200
Speaker 1: toward that.

530
00:25:38,000 --> 00:25:40,200
Speaker 3: It got a little bit better during the pandemic because

531
00:25:40,200 --> 00:25:43,920
Speaker 3: there was a construction boom. The construction boom was geographically

532
00:25:44,040 --> 00:25:46,560
Speaker 3: limited though it really only happened in the Sun belt

533
00:25:46,640 --> 00:25:50,840
Speaker 3: like Texas, Florida, Arizona, because that's where we allow homes

534
00:25:50,920 --> 00:25:52,960
Speaker 3: to get built. And now we're at the end of

535
00:25:53,040 --> 00:25:55,119
Speaker 3: that and we didn't build enough homes to get us

536
00:25:55,200 --> 00:25:59,159
Speaker 3: out of that that hole that we were in, and

537
00:25:59,480 --> 00:26:01,520
Speaker 3: now more people need home, so we're kind of back

538
00:26:01,520 --> 00:26:03,520
Speaker 3: to where we were when that number first came out,

539
00:26:03,560 --> 00:26:07,040
Speaker 3: which is that three point eight million number deficit?

540
00:26:07,600 --> 00:26:09,280
Speaker 2: Oh neat. Yeah.

541
00:26:09,800 --> 00:26:12,000
Speaker 3: Another thing that I should probably mention is that we

542
00:26:12,280 --> 00:26:15,000
Speaker 3: did some research recently on home ownership rates, and like

543
00:26:15,080 --> 00:26:17,960
Speaker 3: I said before, the number of homeowner households has gone down.

544
00:26:18,400 --> 00:26:20,400
Speaker 3: If you look at the home ownership rate. It's really

545
00:26:20,520 --> 00:26:24,880
Speaker 3: only Black households unfortunately, where their home ownership rate is declining,

546
00:26:25,359 --> 00:26:27,920
Speaker 3: and that might be connected to what's happening with these

547
00:26:28,119 --> 00:26:31,760
Speaker 3: federal layoffs. Black people are more likely to work federal jobs,

548
00:26:31,880 --> 00:26:34,600
Speaker 3: especially black women. Black women are more likely to be

549
00:26:34,720 --> 00:26:39,320
Speaker 3: the heads of their household than other races for that gender.

550
00:26:39,520 --> 00:26:42,399
Speaker 3: So yeah, I think I think that I think that

551
00:26:42,440 --> 00:26:46,440
Speaker 3: that's quite concerning that that demographic of people, they're becoming

552
00:26:46,520 --> 00:26:48,800
Speaker 3: less secure in their employment and that's spilling over to

553
00:26:48,920 --> 00:26:50,159
Speaker 3: less security in their housing.

554
00:26:50,480 --> 00:26:53,240
Speaker 1: So is it that the rate has decreases that are

555
00:26:53,640 --> 00:26:55,119
Speaker 1: we losing our homes to foreclosure?

556
00:26:55,160 --> 00:26:57,639
Speaker 2: Are we selling them? Like? Is there more information on

557
00:26:58,640 --> 00:27:01,320
Speaker 2: where that like, where that's client is coming from, like

558
00:27:01,400 --> 00:27:03,160
Speaker 2: how it's manifesting reality?

559
00:27:03,240 --> 00:27:03,439
Speaker 1: I get.

560
00:27:03,600 --> 00:27:06,760
Speaker 3: Yeah, it's not so much foreclosure, it's more people selling

561
00:27:06,840 --> 00:27:09,239
Speaker 3: their homes and then not becoming homeowners again and then

562
00:27:09,320 --> 00:27:10,800
Speaker 3: fewer first time home buyers.

563
00:27:12,080 --> 00:27:14,600
Speaker 2: Yeah, we're getting kind of squeezed from both sides.

564
00:27:14,600 --> 00:27:16,800
Speaker 1: And then you have my guests for earlier this week,

565
00:27:16,840 --> 00:27:19,359
Speaker 1: two black women who pulled their resources and you know,

566
00:27:19,520 --> 00:27:21,680
Speaker 1: got together and that was their pathway to you know,

567
00:27:21,880 --> 00:27:25,520
Speaker 1: being able to afford a house in this market. Daryl,

568
00:27:25,560 --> 00:27:28,080
Speaker 1: thank you so much for offering those insights. I want

569
00:27:28,119 --> 00:27:29,480
Speaker 1: to give you a chance to chat about your book,

570
00:27:29,600 --> 00:27:31,960
Speaker 1: because I'm never going to ignore a woman who has

571
00:27:32,000 --> 00:27:34,720
Speaker 1: a brand new book on shelves right now. So talk

572
00:27:35,200 --> 00:27:37,800
Speaker 1: talk to us about Hate the Game and what it's

573
00:27:37,800 --> 00:27:38,240
Speaker 1: all about.

574
00:27:38,680 --> 00:27:40,920
Speaker 3: Sure, So I wrote Hate the Game Economic cheat Codes

575
00:27:40,960 --> 00:27:43,080
Speaker 3: for Life, Love and Work. It's all about how to

576
00:27:43,240 --> 00:27:47,879
Speaker 3: use economics to advance your career, to advance your goals

577
00:27:48,000 --> 00:27:50,640
Speaker 3: in life. I have some chapters about buying a home

578
00:27:50,720 --> 00:27:52,920
Speaker 3: and selling a home, but I also talk about things

579
00:27:53,040 --> 00:27:55,800
Speaker 3: like how to apply for a job, how to get promoted,

580
00:27:56,119 --> 00:27:59,159
Speaker 3: And it's all from this perspective of game theory, like

581
00:27:59,320 --> 00:28:02,880
Speaker 3: looking through your options, assessing what the options of other

582
00:28:02,960 --> 00:28:06,400
Speaker 3: people are, and then doing the logic to figure out,

583
00:28:06,440 --> 00:28:08,359
Speaker 3: like what is the best path forward, and how can

584
00:28:08,400 --> 00:28:10,840
Speaker 3: I make a decision that I feel really confident about.

585
00:28:11,280 --> 00:28:14,040
Speaker 3: I know that in this economy everything seems so unfair,

586
00:28:14,240 --> 00:28:16,920
Speaker 3: but one of the messages I try to convey in

587
00:28:16,960 --> 00:28:19,480
Speaker 3: the book is that you can win unfair games, Like

588
00:28:19,640 --> 00:28:21,880
Speaker 3: just because you're at a disadvantage doesn't mean you can't

589
00:28:22,080 --> 00:28:25,680
Speaker 3: you know, outsmart the system essentially and find a path

590
00:28:25,760 --> 00:28:28,359
Speaker 3: forward to get what you really want, and a lot

591
00:28:28,359 --> 00:28:30,119
Speaker 3: of that has to do with defining what is that

592
00:28:30,200 --> 00:28:31,920
Speaker 3: you actually want and just going for it.

593
00:28:32,359 --> 00:28:34,440
Speaker 2: Okay, that sounds ju see. I'm going to need to

594
00:28:34,480 --> 00:28:36,160
Speaker 2: get a copy of that, all right. It's called hate

595
00:28:37,119 --> 00:28:40,280
Speaker 2: by my guest today, Darryl Fairweather, again, the chief economist

596
00:28:40,360 --> 00:28:41,080
Speaker 2: at Redfinn.

597
00:28:41,200 --> 00:28:43,760
Speaker 1: Darryl, thanks so much for joining me on Brown Ambition.

598
00:28:44,240 --> 00:28:45,560
Speaker 1: I hope to have you back again soon.

599
00:28:45,560 --> 00:28:47,800
Speaker 2: It'd be great to see you again, and it's nice

600
00:28:47,840 --> 00:28:49,920
Speaker 2: to have a grown up in the room when we're

601
00:28:49,920 --> 00:28:51,880
Speaker 2: talking about these housing trends that just kind of give

602
00:28:51,920 --> 00:28:52,400
Speaker 2: the anxiety.

603
00:28:53,560 --> 00:28:54,320
Speaker 3: Thank you for having me.

604
00:28:55,200 --> 00:28:59,720
Speaker 2: Thank you, Okay, v a fan, thank you so much

605
00:28:59,760 --> 00:29:02,200
Speaker 2: for listening to this week's show. I want to shout

606
00:29:02,240 --> 00:29:06,640
Speaker 2: out to our production team, Courtney, our editor, Carla, our

607
00:29:06,720 --> 00:29:10,560
Speaker 2: fearless leader for idea to launch productions. I want to

608
00:29:10,600 --> 00:29:15,240
Speaker 2: shout out my assistant Lauda Escalante and Cameron McNair for

609
00:29:15,360 --> 00:29:17,920
Speaker 2: helping me put the show together. It is not a

610
00:29:18,200 --> 00:29:21,320
Speaker 2: one person project, as much as I have tried to

611
00:29:21,440 --> 00:29:24,680
Speaker 2: make it so these past ten years, I need help, y'all,

612
00:29:25,200 --> 00:29:27,400
Speaker 2: and thank goodness I've been able to put this team

613
00:29:27,560 --> 00:29:30,360
Speaker 2: around me. To support me on this journey, and to

614
00:29:30,480 --> 00:29:33,440
Speaker 2: y'all bea fam I love you so so so so much.

615
00:29:34,160 --> 00:29:36,680
Speaker 2: Please rate, review, subscribe, Make sure you signed up to

616
00:29:36,720 --> 00:29:40,280
Speaker 2: the newsletter to get all the latest updates on upcoming episodes,

617
00:29:40,440 --> 00:29:45,520
Speaker 2: our ten year anniversary celebrations to come, and until next time,

618
00:29:45,920 --> 00:29:47,240
Speaker 2: talk to you soon via Buy