979: BiggerNews: What Happens to The Housing Market if Mortgage Rates Stay High?

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 28 June 2024

⏱️ 40 minutes

🔗️ Recording | iTunes | RSS

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Summary

Mortgage rates were supposed to be going down by now, but what happened? Even in late 2023, many housing market experts predicted that we’d be seeing high to mid six percent mortgage rates at this point and hovering around the high five percent rate mark by the end of the year, but the Fed isn’t showing any sign of lowering rates soon. Some experts even believe rates could go UP again this year as the job market stays hot and the economy sees unprecedented strength. This begs the question: What IF mortgage rates remain high? It’s a reality many of us don’t want to see, but 2024 could end with minor, if any, rate cuts, keeping monthly mortgage payments high and affordability low. So, what should an investor do in this situation? Sit on the sidelines? Invest in a different asset class? Pray to Jerome Powell? While that last option may be worthwhile, top real estate investors are saying that NOW is the time to buy BEFORE rates fall. What do we mean? We’ve got the entire expert investor panel from On the Market here to give their take on what investors should do IF rates don’t fall. From house flipping to long-term buy and hold rentals, our nationwide panel of investors shares exactly what they’re doing to make money even with high interest rates. Plus, we’ll give our predictions on when rates could fall, what will happen to housing inventory, what young people should do NOW to get their first house, and why investors need to “reset” if they want to thrive in this high rate housing market. Support today’s show sponsor, Rent App: the free and easy way to collect rent! In This Episode We Cover Mortgage rate predictions and when interest rates could finally start falling What should investors do IF mortgage rates stay high throughout 2024 The “lock-in effect” and whether or not high rates are leading to lower inventory The homes that are flying off the market in many areas (and the ones that are sitting) How young people can creatively get into their first home or investment property Why investors MUST “reset” their expectations if they’re to build wealth in this housing market And So Much More! (00:00) Intro (04:45) When Could Mortgage Rates Fall? (13:48) Inventory is Getting Gobbled Up (19:56) Can Young People Make It? (24:19) Investors Must "Reset" Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-979 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Hey everyone and welcome to the BiggerPockets real estate podcast on today's
0:04.4	episode we are actually going to do a little bit of a crossover event for bringing you a
0:09.7	show that aired back in April on our sister podcast on the market. It's one of our most
0:14.0	popular shows we've ever done on that show. And in it we discussed what happens if
0:19.8	mortgage rates stay high and given everything that's going on that is becoming more and more
0:26.4	of a reality or at least a possibility. Since that show aired we've heard a little bit more so I just want to fill you in on what's happened just to make everything in this episode makes sense.
0:36.8	On June 12th, the Fed signaled we would be seeing only a single rate cut this year, which is a deviation from the fourth the market
0:45.1	had predicted and hoped for at the beginning of the year.
0:48.4	inflation is still pretty high it's above 3% and it's feeling like it's going to be a long time until we get towards that 2% goal.
0:57.0	And last update here is that as of today, according to Mortgage News Daily,
1:02.0	the rate on a 30-year fixed mortgage is just above 7%.
1:07.0	Other than those couple updates, the conversation and contents of this episode are just as relevant right now as they were back in April and
1:14.4	they might even be more relevant because interest rates have stayed high and we have
1:19.1	no idea if and when they'll fall so I think there's going to be plenty of good information and tactical
1:24.7	advice that you can use in your investing portfolio from this episode.
1:29.1	Our bigger news episode today is brought to you by Rent App. This is a free and easy way to
1:35.1	collect rent and if you want to learn more go to rent. app slash landlord.
1:39.3	Let's jump into it. At the beginning of the year there was a lot of optimism that we
1:44.1	would see mortgage rates decline over the course of the year. So far that
1:48.8	hasn't happened. So the question we're going to dive into today is what happens if interest rates stay high?
1:56.1	What does this mean for housing inventory?
1:58.6	First-time homebuyers, investors?
	...

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