The Fed Just Lied And Mortgage Rates Spiked Overnight

Andrew Katie, what happened at this last Fed meeting? I see that rates are starting to actually move up pretty quickly. What's going on here? >> Yeah, it seems like every time the Fed cuts interest rates, rates go up.

And honestly, it's it's kind of getting annoying being on the mortgage side of this where we get the anticipation of things getting better. And yesterday, there's a lot of things that happened after these Fed press conf or after the Fed rate cuts that can impact rates, but yesterday's market selloff was 100% due to what Jerome Powell said in the press conference afterwards. There were really two big things that the markets very strongly disliked. If Do you want me just to roll into it or should we >> Yeah.

What what spooked the market cuz here so here's a picture of the US 10-year Treasury and you can see obviously when Powell opened his mouth that basically just spiked 10 basis points and it's continuing to rise today and that kind of move is pretty significant. We've been seeing this downward trend and we're all hoping for there to be more downward trend and and part of that was you know we saw a huge jump in refi applications. So like oh maybe rates will come down and we'll see some sort of uh rebound in the housing industry next year and now it seems like the Fed is basically saying that's not going to happen. And I noticed there's some talk about uh quantitative you know tightening stopping you know later in December.

You know they're not going to use uh money that's coming in to buy mortgage back security. They're just going to buy treasuries. Those type of things actually, I think, will impact rates upwards, right? >> Yes.

So, so there's two things that happened yesterday. The the biggest gutshot to the market and and I was literally watching the press conference live and I had all my charts up in front of me and the moment Powell said this is when we saw the markets just go through the roof. Is the markets had telegraphed. You know, consu or investor expectation yesterday was a 100% chance of a Fed rate cut, but yesterday morning the markets were telegraphing still a 96% chance of a Fed rate cut on December 10th.

>> Yep. >> Jerome Powell took the stage and in his words he said, "A December rate cut is not a foregone conclusion." And then he paused and he was like, "In fact," and he kind of chuckled. He was like, "In fact, it's far from it. And that really spooked the markets.

By the time Jerome Powell was done with his press conference in the 40 minutes he spoke, the projections for a December rate cut went from 96% to 66% and further down today. The other thing that really impacted the markets in a negative direction yesterday was we knew that they were going to stop quantitative tightening. They were going to stop, they were going to basically let treasuries, they've been letting treasuries and mortgage back securities roll off their balance sheet and they're no longer going to let that roll off happen. We expected it because Fed Powell had te kind of telegraphed that they would stop treasuries first and they would just reinvest back into treasuries, >> right?

>> But what he said yesterday really spooked the markets is he didn't say we're investing back into treasuries. He said we're investing into T bills. >> Yeah. Which is a much shorter yield.

>> Yeah, >> it's a short-term thing. And that really spooked the markets. The markets were expecting the Fed to basically start buying up some of the treasuries that are out there and potentially buying up some of the mortgage back securities. Well, they dropped the double bomb on us yesterday.

Yes, we're going to let mortgage back securities mature, but we're going to invest the profits from those into T- bills, not necessarily into treasuries. And that those two things combined have just put investors in a really bad spot for the optimism of a future Fed rate cut and really what this is going to mean long term. >> Just like let's break this down for the average person. Why would the Fed be doing a rate cut right now when we have 3% inflation when their target's 2%.

What would be the reason for them to do that now? Stocks are at all-time highs. Almost every asset class is at all-time highs. What are they trying to do?

>> So, obviously the Fed has a dual mandate. You know, their mandate is maximum employment and price stability and they believe based on the data that they've received and now it's been very very wild lately with the government shutdown, we haven't gotten the data we need. But in Jerome Powell's own words in the press conference yesterday, he said, "We have a dual mandate and we feel over the past few months, >> the I forget the words he used, but basically the one that became the higher risk is the is the unemployment numbers, right? So we we believe that that there is more downside to employment stability right now than price stability because they did and he mentioned it in the press conference yesterday.

They do yes inflation is running 3% but they think there could be anywhere from 3/10en of a percent to half% one-time inflation due to the tariffs in that. So, the long-term run rate, if you take the one-time hit from from tariffs, could be closer to 2.5 to 2.7%, which is much closer to their long-term run of 2%. And with unemployment rates starting to come up, with the jolts, the job opening labors uh report really starting to suffer, we're seeing job losses rather than job creations. The Fed just looks at this and says the employment numbers are actually weighing on them way more than inflation numbers are right now.

And Powell alluded to it in the press conference yesterday basically that they have a really hard job because they're still above their target inflation and they're starting to see cracks in the labor market. So it's a really hard job. >> Yeah. So they're concerned about the labor market.

And usually when we see rate cuts that come through when everything's hitting all-time highs, we see asset prices continue to move up over the next uh 12 24 months. But this is what's actually happening. So mortgage rates jump 20 basis points following the Fed cut. So that's what we saw the other day.

And I want to talk about this because there's actually a really interesting interview that came out with Ray Dallio who is the former hedge fund manager of Bridgewater. And he says this and and this is the concern about doing a rate cut into all-time highs is if you're looking at let's say the AI world and really what amounts to about three million people 1% of the population leading and then the five or 10% around them you have one world where the whole world is dependent on and then you have the bottom 60% of the population consider that 60% of American population has below sixth grade reading level which is awful that's tough and with that they're becoming unproductive and because of those things you have dependency and extreme dependency The numbers back them up for 22 states in recession while only 16 are growing. California, New York carry the entire economy of their areas. Wealth inequality has exploded since 2020.

And I can tell you, I see this with my friends that haven't yet built their wealth, and I'm sure you see it on the mortgage applications. There's you're either seeing somebody who is very well off who owns a bunch of stocks and assets that have gone up and meanwhile you see the other side of it with people who are trying to scrape two nickels together to to be able to buy a piece of real estate. So the top one.1% nearly doubled their wealth from 12 trillion to 22 trillion. The bottom 50% just gained $2 trillion combined.

And we're starting to see this kind of get worse and worse. And I'm curious like how does this impact the next generation of home buyers for real estate considering if we drop rates, prices keep going up, they can't get in and purchase these these properties. What is this going to look like? I mean, yeah, it is concerning.

I mean, that bottom line you have on there is is deeply concerning that the top onetenth of 1% gained 12 trillion while the bottom 50% gained two trillion. That that's a concerning number. Uh some of this stuff is outside of my wheelhouse. Just being very honest.

But what I look at when you you start to see where he says, you know, two states are essentially carrying the entire economy on their back. Yeah. And if you look at the stock market, there's about seven stocks that are carrying the entire Dow Jones. If you take Nvidia, you take some of the big players off the table.

>> We are in recession on those times. It's we feel I feel like we're in a bit of a propped up situation, a propped up economy trying to prop it up more, right? I mean, that's one of my points is it's already been propped up with zero interest rate policy for years and years on end. And now we're cutting because we're feeling a little bit of pain that we need to feel in the marketplace for things to kind of smooth out.

But instead, the government and the administration is saying, you know what, let's cut let's keep cutting and see how low we can go and keep pushing this this thing forever. >> Right? And and for me, it's this is what the Federal Reserve does is one of the clearest cases of market manipulation that's out there. Like they are literally just manipulating our markets.

And it begs the question that if the Federal Reserve was abolished, what would actually happen? I think we would have massive, massive issues initially. But I do think the long term, fast forward 10, 15 years, I think we would have a much more stable growth economy rather than having quantitative easing. Well, we went too far with quantitative easing.

Let's go quantitative tightening. I mean, let's not forget the Fed ran a balance sheet of over $9 trillion. 36% of the GDP of America was the balance sheet of the Federal Reserve. Now they're down to 25%.

And Powell says that like that's a badge of honor. The keep in mind the Federal Reserve has a balance sheet that is 25% of the GDP of America and and it's no badge of honor. It's it's market manipulation at its greatest. I I think we need to see unemployment rise.

We need to see the market hurt. We need to see stocks come down. We need to see that calamity. And the longer we continue to play games of staving it off, the the harder the ultimate game is going to fall.

It's kind of for me it's like building a house of cards. If you build a house of cards and you do it for 6 months and it falls, it falls. But if you continually prop it up and you prop it up and you build it over the course of 15 years, it gets higher and higher. And when it falls, the harder it's going to fall.

And to me, it's just they're manipulating the markets to try and prevent what actually needs to happen, which we need an economic correction, not only in housing, but we need an overall massive correction. We we need prices to come down because I don't understand who the next buyer is going to be. So totally agree with what you're saying. So this is a really interesting chart.

It's percent of population under the age of 18 from 1990 versus 2024. You see that the population under 18 is down about 20%. It's falling. The people are not having kids.

So we have this older generation of boomers that are 61 plus years old who are sadly going to be passing away. Uh 15.6 six million boomers in the next 10 years is what some of the studies are saying. And meanwhile, you have them, you know, young people having less and less kids because they can't afford to have them. They're waiting longer.

They're dual income. There's that stat out there where there's only 12% of people who are 30 year years old and married versus prior to, you know, decades ago used to be more than 50%. And it's when I talk to young people today and I talk about the home buying, there's no chance that they ever have an opportunity in today's market to be able to purchase a home at today's prices, today's interest rates, and they feel like they're completely locked out. They're hoping that the market does go down so that way they can get back in.

But the builders, it seems to me, Andrew, they continue to build. The government continues to pump. It's just like they won't change this habit where they're just addicted to this easy money and those who don't have assets are being left behind at like the fastest rate that we've ever seen. And I think it's going to cause a real big kind of population and demographic shift in our country where there's going to be in like 30 years from now, people aren't having kids now.

Like who are going to be the buyers in 30 years? Who are going to be those home buyers that are going to get the houses from the people who pass away? And and that may be a long-term reason why we see home values dramatically decline in America. I mean, you look at that statistic, you go from 1990 to 2025, that's a 20% decline in 30 years, 35 years.

Okay? So, is it going to decline another 20% in 35 years and another 25% in 35 years after that? At some point, we reach we reach a point where we simply don't have enough people to buy the homes. Correct.

And we have a over supply of inventory. Now, that's a long long-term game, but a decline of 20% >> longterm game, right? Like it's >> it is, but that's a massive decline in 30 in 35 years. You can't negate that, >> right?

So, the Fed has to kind of decide, am I going to bail out the boomers or the people who own assets by continuing to pump their assets or am I going to let the market come back to where the real value was would be without intervention and let the next generation have a chance at building wealth? And the problem is is there's too much money involved with letting it be. There's a lot of people that are making a lot of money by market manipulation. And there's no administration.

I I don't care whether this is Trump or Biden. I'll mention both their names. I don't care whose administration it is or was. Nobody wants an economic collapse on their watch.

So, everybody's going to punt the ball down the road as fast and as far as they can to get it to be someone else's problem. And the real issue I have with that is they've been successful with it for a very long time. Typically, you don't go I mean our yeah, we can look at what happened in 2020. That was a blip in the radar and that was a pandemic induced recession and it was very very short-lived.

But if you go back, I mean this is the strongest bull market we've ever seen and the longest bull market we've ever seen. And I think it's market manipulation that's ultimately just trying to kick the kick the can down the road to make it someone else's problem. And unfortunately, they've been successful at it for a very, very long time. >> Yeah.

You can look at this. Look, in 2021, the income needed to buy a house just like almost doubled because of this manipulation of the market, right? They made it really, really cheap to buy a house, so it pushed asset prices up. Then they raised interest rates and they made it really expensive to buy a house.

The income needed to buy a house is the incomes are not keeping up with the cost of basically anything. You look at health insurance, insurance costs, you look at your mortgage payment, your rent income, all this, the average worker is falling behind and there's less workers because people are dropping out of the employment situation. >> People are dropping out. And as much as we say AI is not not taking people's jobs, it absolutely is.

I mean, I I just look at what I use AI for on a day-to-day basis and and like I don't have a nutritionist anymore. >> Yeah. Are you using Atlas now? >> Uh, no.

I'm still on I toss between GPT and and Grock right now. But for me, like I don't need my nutritionist anymore. That's one person I can just fire. I have the best data at my hands at all times.

And and you know, going back to the thing Dalio said, you know, AI AI is going to solve a massive massive problem. When we say I don't remember the percentage, but a massive percentage of people reading at a sixth grade level. >> Yeah. Those people are going to rely more and more and more on AI for daily life.

And and when that happens, yeah, we're going to see less job creations. At some point, the house of cards has to fall and the propping of up of the data just just isn't going to be there. And I think we're starting to see it with the job reports. We're starting to see that falter.

We've had negative negative job creations. And I guess we'll see what happens when the government reopens and how much longer that's going to be because until it reopens, we won't get a Bureau of Labor Statistics jobs report. The data is just not going to be there. We'll still get our CPI report, but it'll be delayed by a month, but we won't get the the personal consumption expenditure to see what it's actually costing the consumers.

Um, you know, this whole thing is it feels like there's a lot of funny business going on behind closed doors while the government's shut down. And and maybe I'm just a conspiracy theorist reading into that, but it sure seems like there's a lot of stuff going on behind closed doors. >> Yeah, we all know it's shut down because of the Epstein files. I don't want them to come out.

No. Um, all right. So, let's dig into this because look, a lot of the people who are watching, they're either a buyer, they're a seller, or they're an investor, and they're concerned about their real estate, their assets, and things like that. Now, I sold all my real estate in 2022, 2023, and I'm very glad that I did because I thought that rates going up, asset prices would come down.

I do believe that they will continue to come down in the future. We're grinding along the bottom in the number of existing home sales. And each year I do an analysis on this is called NEFAR, the Northeast Association of Realtors, and basically I get to look at what are the production levels of the agents in the area and how does that impact the consumer. So you can see here about 76.8% either sell zero or less than $2 million in sales per year.

I mean this means that their income after tax is often less than $30,000, right? So a lot of these people in these buckets, they have they're either part-time or they're just like below the poverty level of income. So I don't know how they make their money, but that's the majority of real estate agents. So, if you're a seller and you're looking at this chart, you're saying, "Oh gosh, I don't want to get stuck with one of those agents to sell my house because they're not really professionals.

They're not selling as much." Now, some of them are really good and they take care of their customers. The vast majority of them do not. Then, we're looking at the top percentage of agents above 10 million. 3.2% sell more than than 10 million.

That's when things are like really full-time and they're really great agents. So, 3% are phenomenal. And then you have about 20% that fall in the middle between the 2 to 8 million where people are starting to actually make it into a business or career. But when you're looking at this and you're interviewing realtors, ask them how many have you sold, not their team, not their brokerage, them themselves, how much they have sold.

And if you need to get in touch uh with me and you want to find out who's the best agent in your market, so I can, you know, I can actually interview with them and make sure their stats check out, I'm more than happy to do that to connect you with the right person. But Andrew, when you look at this chart, what does it make you think? And how does this impact buyers and sellers in and how they search for an agent or how they they search for real estate? And >> and what what's crazy is if you probably ran these numbers in 2020, the chart would look entirely different.

This is indicative of skilled agents in in 2020. If you had a pulse, you could sell real estate. I mean, I always joked like being a sellers's real estate agent in 2020, like like you you could have taken two photos on a 2001 cell phone, put it on the market, didn't even put your yard in your sign in the yard, and the property would have been sold. The numbers back then didn't mean anything.

This means the old 8020 rule is out the door. It's not 80% of the agents doing 20% of the business. This is 5% of the agents. 5% of the agents are doing 95% of the business and 95% of the of the agents are doing five.

And and that number is should be shocking to me. It it shows the skill level of agents. And we're seeing the exact same thing in the mortgage industry. >> Yeah.

>> You have guys like me that are I'll close, you know, over 20 million this year. And it's a skill level that you have where the average loan officer right now is closing one deal just about every quarter. They're they're closing on average. 28 deals per month.

So, just over one loan per quarter. To me, it's a skill level. And if you're a home buyer, you need to be interviewing your agent. And what John said is so key.

How much business have you sold personally because I I know loan originators that will say, answer that with a team stat or a company stat. Oh, my company's done 3.8 billion this year. Okay. How much of that have you done?

How many transactions? And don't let them I would also take people to go away from the dollar amount on this. If you're a home buyer, ask how many transactions they have helped either if you're looking at buying a home. How many buyers have you worked with this year that you have closed a transaction?

Because it can be really deceiving. You may get one $3 million deal and you look like you're an absolute baller, but you've closed one transaction this year. That means your skill level really hasn't grown. You barely worked for the year.

Whereas if somebody like me who says I've done 20 million over 20 million this year, I can look back at that and say that's 42 transactions. I'm consistently seeing different scenarios and being able to work through tough situations. >> Yep. I agree.

So buyers and sellers need to interview. They need to ask the right questions. If you're a real estate agent, you're looking at this chart. You have no competition there.

It's you versus you. It's absolutely insane that you could have any excuse of why you can't produce. I mean, the majority of your competition is part-time and not producing anything at all. So, for you to stand out from the competition, it's insanely easy to do.

So, this is an incredible opportunity for skilled people. And we see the top agents are accumulating more of the sales and they're they're moving up. And then the lower, you know, cohort of the agents, they're just falling off and finding other jobs right now, which I understand. I mean, we're 20 30% below the number of closed sales since 2019, even worse than 2019.

It's tough out there for sure, but this is the time where you need to step up to the plate and customers really do need help in this type of market. We're seeing more and more sellers who are underwater. They don't know what to do. We see more and more buyers who are scared and they need an analysis to determine whether they should rent or buy.

And you need to be able to have those skills to be able to guide them through that process to really help them make the right decision for them and say, "Yeah, it might make sense to rent for two years and then buy, not right now." And that takes a little bit of not only skill, but you need to not be selfish and just try to push to get the sale. And we see all these agents who are out there pushing to get the sale. And we think that's totally wrong. We want to have long-term relationships with our customers and make sure that they get the best service and the best information so they can make the best decision for themselves.

Because look, it's not cheap to buy a house, Andrew. It's 6% on the way in. It's 6% on the way out usually, uh, just in the commissions and fees when you put it all together. So you need appreciation of more than 12%.

So if you're buying and planning to sell in the next two years, we need to have a conversation about that because you could be significantly underwater. I'm talking to people, Andrew, who are in, you know, who bought at the vintage of like 22, 23, 24. Some of them are already underwater $100,000 from the time that they purchased. And there's phase 2, phase three, phase four.

It's mostly around new construction communities. But it's terrifying. And you try to help these people and they don't have a lot of options because when they try to rent it, they're underwater. Six, seven, $800 per month on the rental.

They wish that they had had that information before in 2022. When rates go up, prices come down. Actually, we have a couple interviews out there where we were saying this in 2022. It's like, hey, you need to be really careful if you're planning on selling in the next few years because there's no guarantee that prices will continue to go up 14% per year uh for the next couple of years.

That things are getting frothy and a certain point the affordability crisis as we showed on the other chart I mean it's out of control and when the Fed raised those rates I mean you can immediately see right here's where there's more buyers than sellers that's when we saw prices go up now we're seeing sellers just skyrocket and buyers are continuing to trend down we expect these trends to continue especially after this last Fed meeting where we're seeing rates rates start to move up again and this is going to be a huge problem I mean if the Fed doesn't come in or the government doesn't come in to to prop up housing. We do think that we're going to start seeing a lot of distress in the marketplace, especially quarter two of next year, I believe we should start seeing some more short sales and foreclosures show up in specific communities. Not every community. Again, the area is very unique.

Your local area is very unique. We think the most of the distress are going to come from the people who live in the new construction communities that are completely overbuilt. Unfortunately, Jacksonville is one of those markets where we're overbuilt from multif family and single family across the board. There's a lot of areas of Texas that are like that.

And that's why you see the difference between the Northeast and the South is because there are certain areas where there tons of speculation from hedge funds and from builders and then there's areas that didn't have that type of speculation and they're not going to be seeing the boom bust cycle as much as we are going to be seeing here locally. Andrew, what's your prediction for Florida for the next 12 months, knowing how much business you do and how long you've been in the industry? >> I mean, going back to what you said earlier, the disparity in buyers right now, disparity in wealth, I see it every day. I mean, the amount of of of $200,000 transactions that are coming through my desk right now, and then million plus transactions, but there's like very very few of that 400 to $700,000 range.

Uh, I think people that bought in early 2021 are are probably in a very good spot because they got in while rates were low and before home values skyrocketed. >> Yeah. >> PE people who bought in 2022 and you're dead right, especially in new construction communities. There's a there's a neighborhood that I've visited uh near me.

It's out in Crest View, Florida. >> It was built in 2022 by Dr. Horton. Military community, so most people came in with zero down.

>> Bought the neighborhood out. Dr. Horton is now building new construction less than a mile away. They've overbuilt.

They are now discounting their prices about $25,000 off of where it should be and offering agents 8% commission to move the property. >> Holy cow. And they're offering rate buy downs, right? >> And they're offering rate buy downs.

Well, they also they have for that community, they have a block rate of 4.99%. Right. And so I'm going through this community and talking to sellers that open houses that they're selling their house for a loss one after the next after the next after the next. And there's a whole group of people that got pinched when they bought in 2022, early 2023 where they bought while the rates were low because they were getting that great house, but they bought after the values had gone up.

And you're dead right. Rates go back up. Home values have to set have to cool off. And I've said it with you more than once.

One of two things going to happen as we go into the next year or both. Rates are going to come down. Home values are going to come down or both of them. >> Yeah.

>> And and for me, I think the the perfect mixture would be to see interest rates settle down about another half to 1%. Not drop back into the fours and threes and let home values start to settle down after that. I I I think that provides for a long a longer term healthier market. But if the Fed plays games and we see interest rates back in the twos again, we are literally shooting future generations in the foot.

>> Yeah. They'll never be able to come out of it. They're just >> And maybe that's way too point of at a too high of a price point. They're never going to be able to come out of it.

And it's really sad to see that. And I hate talking to these people who are underwater. These are good people. They're smart people.

They didn't know that they were buying at the top of the market. They're underwater. They're scared. They want help.

The person who sold them the home and the builder, they're asking them for help. Hey, can you guys help us? Like, we're so underwater here. We don't know what to do.

And there's literally nothing that they can do. They signed the paper. They took the house. So, I mean, this is the largest financial transaction of most people's lives.

You need an expert for it. You need an expert for you to to walk you through based on what is happening in your life and what you expect to happen down in the future. This is not like a small purchase like going out and buying a burrito at Chipotle, which by the way, Chipotle is saying the same thing. But to bring this up and bring it full circle, they just came out with their earnings yesterday and their stocks down 16% because they're saying the people under $100,000 don't have enough money to buy Chipotle.

They're not going out to eat. And then there was another article, I think it came out from Yum Brands that was saying the same thing. They're just like the consumer is broke and it's impacting them coming out and they're not only broke, they're in debt. So they're living paycheck to paycheck.

And there's stats that we just showed on our last video. 68% of Americans are living paycheck to paycheck right now. How can you buy a house when you when you can't even afford to pay for food and insurance and all the other costs that go along with living? You know, it's supposed to be shelter costs.

And I'll tell you this, Andrew, we look at the data and it shows that it's up to 40% of somebody's income goes to pay their mortgage. Now, I mean, that's >> I see it higher than that all the time. I see 45 46% of gross income. >> That's that's insanity because how is there any money left over to live?

I mean, they're basically debt slaves at this point to the bank where every dollar that comes in just goes to pay interest. >> Agreed. And I think something you touched on earlier is about hiring an expert. And and I think it's it goes for the real estate and the mortgage side.

Here's why you want to work with a top producer. Okay? And I'll just be very blunt. If you're a buyer watching this, and I'll talk to the real estate agents as well, but if you're a buyer watching this, you're like, "Well, maybe I like Johnny down the street has only sold one property this year." Understand that Johnny absolutely needs your transaction to close because Johnny needs that money.

>> Yes. Whereas someone like me on the mortgage side, and I'm sure John would attest to this on the real estate side, my philosophy is, and if you're a real estate agent, I would challenge you to adopt this philosophy. I will not put a client into a product that I would not put my mother into. Period.

That is my guiding principle is if it if something I would be comfortable selling to my mom, then I would be comfortable selling it to a client. And why you want to work with a top producer, why you want to work with someone that does a bunch of transactions because they're not afraid to tell you no because it doesn't make them any money when they tell you no. They're not afraid to say, "Hey, I don't feel like that's the best move for you and here's why." And if you're working with someone that's done three transactions in a year, chances are they have commission breath and they're desperate to get the paycheck from your closing and they truly don't have your best interest at heart. And and it's not necessarily their fault that they don't have your best interest at heart.

They're struggling as much as the average American right now. But you want someone who's on your side, who understands that, hey, I wouldn't sell this to my mom. I'm not going to sell it to you. And here's why I wouldn't do it.

>> Amen to that. I think that's right. I think a lot of agents will say whatever they can say to get the sale at this point. They're just so desperate to get any sort of money.

We even see, Andrew, a lot of agents going to join flex teams right now. And these are good agents and they're just like, I just need leads. I need anything. I don't care if I make 20 cents on the dollar to go join this team.

I just need something to pay the bills. Well, when you have that type of agent show up and service you, I mean, obviously their motivation is completely different than somebody who's like, you know, I'm just here to help people get the best deal that they can possibly get and advise them along the way versus I have to make a sale or else my family won't be able to pay their mortgage this month. So, I think the energy is different. Of course, there's still agents who are great who are on those teams that definitely look out for the customer, but the incentive is different.

And I believe like the Charlie Munger quotes, show me the incentive and I'll show you the outcome type of thing. And it's exactly right. And I think, you know, and they ignore the data, right? They blindly ignore the data.

So, if you were to show the these agents the data, hey, you should really be careful pitching that or the rate buy downs or, you know, here's the issue with this, here's the issue with that, they might leave things out just to try to get you to buy the house versus actually looking out for your best interest. And I think that's the wrong way to go about business. So, uh, yes, there's lots of desperation out there in the marketplace. There's a lot of solutions, too.

And we're really excited that our company has a bunch of them. And so, if you're an agent and you want to learn about it, reach out for sure. Andrew's got a great mortgage company as well where he can he can help you out as well. If you're looking to especially on the VA side, you're a VA specialist, home specialist.

So, if you're a veteran and you're looking to figure out your eligibility and what the rates are at, definitely reach out to Andrew. But look, we're here to help. So, let's wrap this up. Andrew, my prediction over the next 12 months is we are going to see the market get worse.

I think that the prices will continue to fall. I think inventory will continue to move up. I think a lot of these sellers who are rage quitting right now, they don't get the price that they want, so they take the house off the market. It's going to come back to market next spring.

And I think we're just going to have a flurry of listings come into next spring. And I think if rates don't go down far enough and this affordability issue doesn't resolve, I think the number of sales actually could go lower from here. So if you're hearing that and you're a realtor, it's time to get lean on your expenses, right? Look at every little expense.

Get as lean as possible to to get your runway as long as possible and start doing organic lead generation. Get your habits to where they were pre-2020 time period, pre-bubble period, because if you don't do the fundamentals of what it takes, you're going to be left behind and you're going to have to go back to that W2. And I can tell you nothing is worse than going back to W2 uh after being free in this type of environment. It's very hard to assimilate back in.

It's better to just step up to the plate and get the work done now. Uh so Andrew, any comments on that? >> Yeah, I think I think you're right. I think we see markets going to get tough and I think on the you speak to the real estate side very well on that.

I think on the mortgage side we Jerome Powell is not our friend when it comes to mortgage rates. He doesn't care about mortgage rates. He doesn't care about the housing market. And on one hand I just wish he would come out and say that because I think so many people hang on this like he's going to come in and this is going to happen.

I wish he would just come out in the press conference yesterday and say hey I will not be bullied into anything. If the data says we need to cut in December, we're going to cut in December. The data says we don't need to cut. I'm not going to cut.

But instead, he goes these dramatic moves. I think we see the market potentially get a little bit worse over the next little bit as we head into the supposed December rate cut. But I do think as we head into the next year, keep in mind Powell's tenure is coming up. May is approaching.

They are going to nominate a new Fed chair for the position by the end of the year. And that will drive markets. If we get someone that is very very bullish on cutting rates as the nominee for Fed chair, we could see the beginning of the year look really good regardless of whether Powell is still technically in charge or not. So I do think rates will come down.

I think people who are saying rates are going to be in the fours and three, you're out of your mind. I think I think a healthy good market would be if we could see interest rates solidly beginning with a five handle to mid fives by mid next year to end of next year. I think we find strength in that. But that also allow allows home values to continue to come down a little bit ultimately just helping appre or affordability across the board.

>> Yeah. And if the Fed cuts too much then we'll have this inflation issue again. >> It'll be right back. >> It's we're gonna have the same issue.

So we need to let the market correct. So Andrew, thanks for today. Appreciate it. And we'll talk soon.