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