250 to descript
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[00:00:00] Welcome back to the What's Your 1 More Podcast. I'm your host, Quinton Harris. You're dialed in for episode [00:00:05] 250. Man, I never thought this one would come when we first started this. In this episode, we're going to talk about [00:00:10] some of the headlines that are continuing to mislead consumers. Mainly what is going on [00:00:15] with the new listings?
Where's the demand and can you believe most of the lock-in effect right [00:00:20] now is taking place at 6%? That and more in this episode of What's your one more.
[00:00:25] Good intro. Yeah.Alright, so welcome back to the show here [00:00:30] on 250 episode. You know, we got a special one on deck for you. Come [00:00:35] 251. One of my favorite guests.
let's face it. All my guests are my favorite guests, butthis is gonna be Dan [00:00:40] Habib from MBS Highway. Coming on, we're gonna discuss a lot of what's going on in the [00:00:45] future of mortgages. As well as crypto. Dan is an expert in crypto and [00:00:50] an expert when it comes to understanding the Federal Reserve and the bond market.
Very excited for that on this next [00:00:55] episode. but still then let's dive right into this one. So, hey, let's talk about some of the headlines that are going right now. There are a [00:01:00] tremendous amount of the Doomers coming out. Yeah. You know, I like to talk about these people, the doomers, the doom and [00:01:05] gloom or the Doom porn people coming out.
I mean, these dudes have been at it for like 13 years. [00:01:10] Wrong. Every time. Wrong, wrong again. But now, the premise of this, you know, fall [00:01:15] apart exercise as they talk about real estate is that there's so many new listings. There's [00:01:20] just an abundant of people coming to the market that have to sell.
They're having to sell things are falling [00:01:25] apart. I would say that's inherently wrong for the most part. Yeah, you're gonna have people that you [00:01:30] know are gonna have issues. They're gonna have short sales. but these are far and few between. The foreclosure rates are far and few between [00:01:35] many different things right now.
Far few in between. To isolate that one particular topic, [00:01:40] manner,of a, you know, foreclosures are less than, you know, nationwide, less than [00:01:45] 1%. you know, you've got that, you know, some pockets could be more, right? And same thing with short sales. And to use that as a [00:01:50] headline is kind of, misleading.
But also, you know, leveraging the fact that that many [00:01:55] new listings and active listings are at the market is a bad thing. Is,is pretty ironic. 'cause [00:02:00] lemme back up, you know, in 2008. Our new listings each week [00:02:05] got to almost like 350,000. We're not even at 80,000 [00:02:10] per week right now. So to kind of use this bandwidth knowledge of this market's coming to a halt [00:02:15] is, kind of ignorant.
Let's just call it what it's ignorant and it comes with no backing. But [00:02:20] let me kinda share something with you that I think is interesting. We've got a lot of new listings, yet we have [00:02:25] 22 weeks of positive mortgage application prints [00:02:30] every Wednesday from the NBA, which is the Mortgage Bankers Association.
We get this wonderful [00:02:35] index. It called mortgage application index, and they separate into purchases and [00:02:40] refinance, and then they give you an overall index indicating on a weekly basis [00:02:45] how much mortgage applications are going up or down based on a percentage from the previous week. [00:02:50] We have 22 positive prints, meaning we have 22 weeks of increased [00:02:55] mortgage applications.
Now, you could argue that's demand in the market. You could even point to the [00:03:00] fact that, hey, that's a lot of people applying for both refinances and purchases. [00:03:05] Why is that not showing up in the forms of transactions? Meaning why aren't these people all closing? [00:03:10] They're highly interested. Is it the rates at deter them?
Is it the price? I think it's a [00:03:15] combination of those things. Plus this one with all these new listings coming to the market, [00:03:20] don't you think if you were a home buyer, you wouldn't just arbitrarily list their home? Unless you [00:03:25] knew you could buy another home. So in theory, with more listings coming to the market, you should see mortgage [00:03:30] applications go up because those people that are selling are usually becoming a buyer in another location.[00:03:35]
So they need to know they're qualified. So applications are going up. But here's the interesting thing. They're eventually going [00:03:40] to connect. And they're going to connect whether the rate market goes up or down. Because what we found [00:03:45] out between the end of 22 and all of 25, these mortgage ranges between six and 8% [00:03:50] didn't stop transactions from happening.
They still happened. They weren't even record lows. They were [00:03:55] in line with the standard years that we would normally see. So even with all of the rates, it still showed us [00:04:00] there's a demand level there. There's another thing that we're uncovering right now. We're starting to see the data and the results come in [00:04:05] a year ago.
Even two years ago, I was sitting on this platform talking about the lock-in effect. I [00:04:10] even had pie charts showing where the mortgages were locked in and what interest rates were tied to the national [00:04:15] homeowners. Interesting stat of all the homeowners in the United States, of all of them [00:04:20] we're now 40% of those are free and clear.
40%. That's [00:04:25] interesting to me that 40% of them and 82.6% of all [00:04:30] mortgages in the United States have an equity position of 30% or greater, [00:04:35] meaning that they only owe 70% of the value of their home or less [00:04:40] than That is a huge differential between 2008 for all the doomers out there. It is a huge [00:04:45] differential and you know, I've seen people come to our site and come to our, YouTube channel at, what's your one more with the number one, and they've [00:04:50] argued.
By the way, if you're not subscribing to that, please go do that. We put a lot of favorable charts [00:04:55] in there. Charlie, my producer, does a fantastic job of putting a lot of great graphics in the [00:05:00] channel there, and I think it's something that if you're listening to this on Apple or Spotify, definitely appreciate it.
Please give us a [00:05:05] five star review, but make that switch over to YouTube, check it out, hit the subscribe button. We'd love to have you guys, [00:05:10] check us out on there and give us your feedback. But some of the feedback we're getting are people going, oh yeah, but that equity is just false [00:05:15] inflation, and you know, we can't sustain this.
But we have, right, that's the funny part. We [00:05:20] have, we've sustained it. You know, if you're gonna subscribe to the idea that the real estate world's [00:05:25] gonna collapse, go back to 2005, maybe even late 2004, you [00:05:30] could see the collapse of the credit market starting to happen. You could see the increase in bankruptcies being [00:05:35] filed two to three years before.
It happened in 2008. [00:05:40] So let's rewind to 2022, three years ago from today. Well, we know we [00:05:45] were having one of the biggest, you know, I guess you could say, economic meltdowns with [00:05:50] inflation and interest rates, making the rise. They did adjustments from the Federal Reserve, And three years from that date, [00:05:55] we should see this quote unquote collapse, but we didn't, and we're not going to, and that's because [00:06:00] it's a different market.
The credit roll from the creditors are different. The credit acceptance is far tighter, [00:06:05] the guidelines are far greater. The due diligence is being done. Those things are not going to happen. So the [00:06:10] question is. Can we sustain the current price points that we're at? Well, yeah, we're seeing price drops in the [00:06:15] area, but we're not seeing catastrophic drops.
And you're also not even getting near the [00:06:20] 2019 levels that you had getting, excuse me, that you had received during COVID. Because during [00:06:25] COVID in 20 20, 20, 21, 22, even parts of 22, you got massive gains. So even if [00:06:30] you're seeing, you know, 5% drop, 3% drop in prices, I mean in Florida, [00:06:35] we're just now starting to see prices drop.
A little, not significantly, but a little. Now again, [00:06:40] there's pockets. I understand what some of the people are gonna say, but overall, you're still seeing Florida [00:06:45] hold the line on that. Where we're located, other states are going to be different, but my point with that is even with these equity [00:06:50] positions that you have, you can absorb that as a seller.
Interesting enough, when we [00:06:55] look at that lock-in effect, going back to that, what's interesting to me is that on the [00:07:00] lock-in effect wasn't maybe two years ago, the bulk of the loans were 4% or [00:07:05] less. Now you're seeing 6% show up. [00:07:10] 6% is the dominant number. So there might not even be a lock-in effect anymore.
People may have sold their [00:07:15] homes and unlocked. There was this theology that people were just gonna refinance. I still think there's a large, refinance wave coming [00:07:20] through, very large coming through. matter of fact, we've seen from CoreLogic reports talk about over [00:07:25] $4 trillion worth of refinances that are going to be done over the course of the next year and a [00:07:30] half.
So you're still gonna see that kind of impact happen there from those lock-ins. But it's not what it once [00:07:35] was. And so where I'm getting at with that is that the world didn't stop. Transactions didn't stop. The [00:07:40] doomers are wrong again. Deals are getting done and people are buying [00:07:45] homes. They're selling their current home, buying another home.
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[00:07:50] [00:07:55] [00:08:00] [00:08:05] [00:08:10] [00:08:15] [00:08:20] [00:08:25] [00:08:30] [00:08:35] [00:08:40] You [00:08:45] know, I thought this last week we had the momentum in all of our favors. [00:08:50] There were so many things in line. You know, my guest next week I talked to about, excuse me. Yeah, next episode's Dan ha [00:08:55] be, we're recording the episode on Thursday. He and I were talking and he said, cube man, everything is lining [00:09:00] up to where if we get some good prints on the job, reports, meaning.
A [00:09:05] DP comes in favorable and the BLS comes in favorable. He's like, dude, it is [00:09:10] gonna send a massive win for the mortgage rates, and in the bond market. And [00:09:15] so everything was falling in line. Boom. We had a good a DP report. I think the report was supposed to come in at [00:09:20] 95,000 jobs in the private sector.
It was negative 33,000. now that's not good if [00:09:25] you're looking to get a job, but meaning from a mortgage rate standpoint, that negative print was very [00:09:30] important. And then we had jobless claims that were in line on Thursday, and then [00:09:35] we were waiting on that B, excuse me, on Wednesday. And then we were waiting on that BLS report.
And the thing about the BLS report was that [00:09:40] we were waiting on that on Thursday, 'cause it was July 4th. Usually it comes on Friday. July 4th was Friday. We were [00:09:45] waiting on that report to come in and everyone is anticipating for it to come. In [00:09:50] expectations line or a little less, and it came over, and when it came over it was kinda like, oh [00:09:55] man, the one domino we needed there didn't fall.
Like, I feel like that's the third or fourth time in three years that's happened. [00:10:00] How could that happen? Right. I mean the, the Biden administration caught a lot of shit, let's call it, [00:10:05] for what it is for all these inflated government jobs that popped up and now we're seeing that. Happening under a [00:10:10] report under the Trump administration, you're probably sure Trump was scratching his head going, how the hell did that happen?
So when you look [00:10:15] at the government sector on the BLS reports, 'cause the private sector was down, you look at the government sector, what was interesting is [00:10:20] all the jobs came from state and local. and jobs mean that. Those are like, you know, [00:10:25] teachers, police officers, like those are all state and local jobs showing up [00:10:30] community jobs that are all state funded there.
That wasn't federal jobs showing up, and I'm not defending that [00:10:35] by any means, but I'm saying that was one of those where it was like you didn't see that one coming. you can even go back over this [00:10:40] time, year over year. That's not usually that big a jump during that time. It was deflating and the [00:10:45] bond market.
Quickly took to selling and retreated. And that sucked because we had significant momentum in our [00:10:50] way. And a lot of people thought that if that print came in less than expected, the Federal Reserve would be [00:10:55] having no choice than to proceed with a rate cut. And now you've got this kind of [00:11:00] situation where Powell and Company I.
And maybe they're not part of that, that shadow fed that I talked about [00:11:05] last episode. But they were sitting back on their heels going, alright, now we don't really have to do anything. We can [00:11:10] wait. We can wait and see. So in the July meeting, we'll wait, we'll roll into September and we'll see what [00:11:15] happens.
And I think that is not. The win we wanted in the rate market because what was [00:11:20] happening right now is spreads are getting better. You've heard me talk about that over and again, the 10 year versus the mortgage 30 year [00:11:25] fix of what that spread looks like. That's been retreating. We had a lot of, positive momentum on the 10 [00:11:30] year yield and just it all evaporated immediately.
the spreads are still getting better, but that evaporated and that was a [00:11:35] little bit of a bummer because where that was heading was that was heading below six and a half to stay down around that six and a [00:11:40] quarter and give us some really good momentum. To finish out the peak season. 'cause we're in peak season right now, and we probably [00:11:45] got two more weeks of peak season and that would've been ideal.
So now the question becomes is what does fourth quarter look like? [00:11:50] Can fourth quarter provide that peak season? I don't know. I don't know. We'll have to wait and see on this, especially if the Federal Reserve [00:11:55] does start making those cuts in September as suggested, and maybe they surprise us in July, but the odds are they're [00:12:00] probably not going to do anything, based on those last couple of prints and the fact that.
You know, they're still [00:12:05] tied into the fact they think inflation's going to be, something more than what it is currently. So, I will say [00:12:10] this, we're gonna have some in-depth, forecast with Dan on the show. We're gonna talk about stable [00:12:15] coin and why that's tied to the 10 year treasury and what that can do for the 10 year treasury and what that can do for the bond [00:12:20] market.
We're gonna talk about a little bit of crypto and what's going on in the market. We're definitely gonna talk about the Federal Reserve. We're gonna talk about mortgage [00:12:25] interest rates, and we're gonna talk about. What has to change in 2025 heading into [00:12:30] 2026, and why even no matter what the news headlines say right now, the market that we're in [00:12:35] for real estate and mortgages is still on track for what we would call par.
It's still a normal market, [00:12:40] even though it doesn't feel like that. And we'll kind of break that down in more in the next episode. So if you haven't subscribed yet, go our [00:12:45] YouTube channel. Check us out at what's your, one more with the number one. Also check us out on Apple and [00:12:50] Spotify. We'd love to get your feedback.
Five star. Review us on that. This is a little quicker episode because the next one you're gonna get with Dan is probably gonna be [00:12:55] over an hour. So look forward to seeing it. The next episode at What's your one more.
I got one more shot. I'm gonna [00:13:00] make it one more chance. [00:13:05] [00:13:10] [00:13:15] I'm.
