The TRUTH About America's Housing Problem

"all three Fanny May Wells Fargo and the Mortgage Bankers Association are predicting a pretty steep decline in mortgage rates starting the third quarter of 2023 which is essentially right now through the fourth quarter of 2024 meaning through the end of next year"

"the Mortgage Bankers Association is expecting the biggest drop between now and the end of 2023"

"the National Association of Realtors also keeps talking about how they're predicting a drop in mortgage rates very soon"

"if tomorrow mortgage rates went from 7% to 3 and a half% what would happen what what would happen is you'd have all these buyers or people who want to buy a home that are sitting on the sidelines flood into the market and start buying a home again"

"and if you remember what was going on 12 to 24 months ago we were seeing bidding wars everywhere you had all these people that wanted to buy a home and these many people that wanted to sell it and when you have so many people that want to buy a home compared to the few people that want to sell it now the people that want to buy a home are going to be putting all these offers to the few people that want to sell it and now you have bidding wars"

"and this pushes home prices up why because when you're a seller and you list your home for $500,000 and somebody offers you $600,000 you're not going to say oh you know what you keep that extra 100 Grand in your pocket just give me $500,000 and we'll call it even no you're going to want every penny that you can get so you're going to sell your home for $600,000"

"then your neighbor's going to say oh wow you made $600,000 for selling your home maybe I should sell my home for $600,000 and now you can start to see home prices slowly start to trickle upwards or even not slowly sometimes it can be quickly"

"if the housing market indirectly or directly makes up about 40% of the total inflation number and the Federal Reserve Bank has been working to increase interest rates to bring inflation down well if they cut interest rates and mortgage rates fell where is inflation going to go inflation would shoot back up"

"inflation would shoot back up because now you're going to see the bidding wars happen again you're going to see home prices rise very quickly again and that's going to put more upward pressure on the inflation problem which then would mean that the feder Reserve Bank would have to start the same cycle all over again to keep increasing interest rates"

"when you have more buyers than sellers more demand than Supply that pushes home prices up when you have more sellers than buyers that pushes home prices down"

"now what we're seeing happen today is we have a very low amount of Supply we have a very low amount of sellers at the same time we have less buyers because interest rates have gone up so much but buyers are still there more than Sellers and so this is where the Federal Reserve Bank can work on the demand side"

"we also need more Supply the question is how do you get more Supply you can do it voluntarily or involuntarily the voluntary way is Builders go out and they build more homes or they build more apartment complexes"

"if demand goes down because people can't afford homes then sellers would be forced to cut the prices of their homes"

"the FED Reserve Bank does not want to see home prices fall instead what they want to see happen is they want to see home prices grow at a more steady and slow rate"