WARNING: 30 Year Mortgage Rates Going to 7% in 2023? OR Will they go to 4.%% as Fannie Mae Predicts?

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Good morning good afternoon good evening folks michael zuber one rental out of time back with the one and only matt the mortgage guy how you doing buddy i’m doing good mike how you doing i’m doing well we are going to tackle a topic that you and i i think might actually disagree on and this should make for entering interesting viewing uh i really appreciate disagreement

Uh discussion especially from knowledgeable experts so uh why don’t you actually do the whole where can people find you first because this might get heated and i might actually forget to ask later i don’t want you to forget as we’re fighting tooth and nail um yeah if you’re looking to get pre-approved me and my team are happy to help greatmortgagebroker.com um

Happy to advise and help i think a little disclaimer um just because i’ve had some internal talks with my team which is growing every day to support as many people as possible um we we would love to help potential future clients um if you want to drain us of every ounce of education you can get and then go use better.com skip us and just talk to some kid in a

Call center and best of luck to you um i don’t know i felt the need to say that but i’ve just we’ve had a few experiences where you know i’m protective of of of the great team that i have you know take a lot of pride in in providing a high level of service but we’re not a functional business if we provide all the service in the world and then you just go to uh

The 99 cent store and get your mortgage i wouldn’t recommend you doing that but anyhow that that’s that’s enough about that great mortgagebroker.com um vast majority of people are um you know yeah clients who who like appreciate that yeah so uh so so that’s enough of that but yeah let’s let’s get into rates yeah so let’s so let’s yeah let’s let’s paint it so um

So heading into last friday i was under the impression that we were gonna get back to six percent we saw what happened to housing and mortgage when rates hit six percent in june it wasn’t good it kind of it kind of it kind of hit the mud and then actually rates came down rates came down about a full percentage point and a little bit more for some and the housing

Market kind of ticked up right july was better than june early august better than june for sure well the federal reserve came out and just walked up to mr market and kicked everybody in the nuts i am choosing to believe powell at his word that could that could all change september 21st that’s where i got you that’s where i got you yeah exactly that could all change

In a minute but uh when i look out at 2023 dude i gotta tell you i i think there’s a really good chance that we start or worst case sometime in q1 we have 30-year mortgages owner ock best credit best down payment seven with a seven on it and it’s a fear it’s actually i’m afraid of that because we all saw what happened when it hit six can you imagine the demand

Destruction and the supply destruction that happens if we get a seven it’s going to be ugly but i think we’re going there i think we could be there for six or nine months so uh disagree with me please tell me i’m an idiot tell me why i’m wrong because this is not a good feeling yeah well uh first off just to set the table for folks like you said um have as rates

Have gone from three to six then back down to five for all intense purposes rough rough right right um i agree with a conversation i heard between you and the lumberjack landlord that that six percent was the number where really put on the brakes demand-wise and i even saw it late june um and i’ve got the metrics and the kpis that i track leads coming in people

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Interested people applying where late june early july as rates started to track back down to five percent people started waking back up it’s more of a buyer’s market i’ve got more opportunity and you know rates are coming back down five and a quarter sounds okay and so i can tell you too that i’m looking at loan officer production numbers and the number of

Loans that are written august was better than july july was better than june so as rates came back down to five things got good as of this morning mortgage news daily average 30-year 5.96 oh no 5.96 oh right as of as of 90 seconds ago mike uh as we’re recording this alert to lock rates are getting worse so we’ve probably got that six handle as just a it’s here

Average um and i thought we might get it this week i did and so so here’s where we probably diverge okay to your point jerome powell all the things he said right we will keep at it until we are confident the job is done there are unfortunate costs of reducing inflation i’m going after all these things would point to i’m going to start doing what i’ve really

Never followed through on yes no i agree yeah asking asking asking jay powell been disappointing a lot of us that have been asking him for a long time and now heels in the sand everybody is excited that knows that this is a necessary evil to kind of reset correct whatever you want to use the word for for for housing supply you know versus demand or at least the

Demand side only side that he can really control um i think what my my reluctance to say okay rates will be at seven and a half in 90 days because he’s just he said it right he said he’s going to increase rates he’s going to do anything well well let me play it out for you because again technically speaking or actually i don’t in all reality the federal reserve

Does not set mortgage rates they don’t right they’re not it’s not a one-to-one relationship right but this is what i see i see us getting to four or four and a quarter or four and a half fed funds sometime january february march so let’s just call it four because it’s a round number if we’re out of four fed funds my thinking is the ten year has got to be five and

A half could it be five and a quarter sure right because all of these things are variable again not one to one but i look at it and go dude it’s got to be five and a half and if the ten years five and a half could the 30-year owner rock be six and a half sure it could but again my fear is everything pulls back the economy goes into recession banks get nervous and

They don’t renew they don’t remove margin they add margin and then soon enough we’re at seven i don’t think we’re at seven all year but i think we’re at seven at the halfway mark and i think the economy is in a recession i think housing is in a depression right i think because i’ve talked about a 30 to 50 percent crash i think we get to a 50 crash in transactions

When when we go to seven so i don’t think we’re there all year but we’re there sometime in the first half next year and again it’s not a good feeling um i’ve i’ve been busy writing mortgages so i haven’t seen all of it but have has the fed or have they verbalized setting a new target for the fed funds right yeah every every uh fed president post meeting with uh

So loretta i forget our last name uh but also yeah three of like um minneapolis and st louis bullard they’re all saying we’ve got to get to at least four or higher we’ve got to go restrictive and most importantly they’re all saying no cuts in 2023. loretta came out today mester i think her name is laura mester says all this call for a cut in 2023 is this hope

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You know is is opium it’s hocus pocus it’s not coming we have a job to do we can’t do it without this we’re we’re not repeating the sins of the 70s we’re at the stop and go we’re gonna beat this thing down to two percent we’re not stop dude 2023 is going to be an ugly economy and housing is front and center it’s it’s the most directly correlated to fed funds rate

Because it’s a lending based business i don’t now 2024 could be an amazing year but 2023 is gonna suck and and you and you believe that even in the face of an economy crumbling the fed’s not going to give in and say okay we’ll give you guys a little relief we’ll give you a little i well again no i don’t so my current thinking is the federal reserve is going to

Get us to three and a half to four percent by december the economy won’t crumble enough by then i think we get a hot jobs number friday for example right uh so we’re going to get banged with 75 on september 21st it’s going to take us to three percent i think we go 75 50 25 because we have three meetings left so what does that get us to like that’s one and a half

Where so that gets us to 375. then they bang us with another quarter which gets us to four in january and they hit us again so we’re at four and a quarter in february or march so yeah they might and now we get to four and a quarter i could see them stopping all year i don’t see a cut anything’s possible of course this is all this is all just guessing but again

It’s funny i talk i started talking about this two days ago and i would tell you that most of the replies or comments or whatever you call them in youtube are telling me i’m an idiot most people think that mortgage rates next year are four and a half well well fannie mae said they’re gonna be four and a half i’m like what the hell are they smoking yeah and that’s

And that’s like what i said i was i was on a podcast last night with saks realty and i said zouber seven fannie mae’s four four to four seven yeah i’m somewhere in between um where you know i reserve the right to change my mind because of course more data’s more data yeah the fed says something new every day um but yeah it’s it’s surprising right i’m looking at

It right now housing forecast from fannie mae q1 4.7 percent 30-year fixed-rate mortgage where does that i mean how the hell did we get there i don’t know i mean literally the the fed would would have to you they would have to cut this this year yeah this no yeah this year yeah that’s that’s kathy wood you know we’re getting a september pivot what how is that

Coming so um so okay so i’m at seven i don’t feel good about it i don’t think it’s a good outcome i think it hurts a lot of people um fannie mae said four and a half yesterday i couldn’t believe it if you were going to pick a number for an average next year you said you’d be twin 2023 average yeah what do you think just a crystal ball you’re at seven by anime

Is mid-fours yeah i’m gonna just pin myself right in the middle five seven five okay and again as of today they’re roughly six yeah i mean i see i see the headwinds yeah so i know of course you do it’s yeah the economy is in for something and i just feel like the fed as much as they talk a big game and say we will do anything for as long as it takes i feel like

After a few of these hikes that you know will eventually hit mortgage rates right like i said it’s not a direct correlation but it’s coming you know the economy sputters q1 sputters q2 i think that they you know pause i think that they still can u-turn in 2023 i might be wrong no so i mean that’s the key right in order to average 575 in my opinion you have to

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Have a cut next year because i think what you’re saying and again don’t let me put words in your mouth you see it you see the fed going higher faster than you did a month ago right but you also see them stopping and then you turning faster certainly faster than i think yeah i mean i think that you know we we’ve already seen a big pullback in demand oh yeah and

Can you imagine what happens at seven it’s it’s i mean it’s wild for me in in my specific market you know in any market who’s seen this type of trajectory yeah sacramento phoenix boise parts of texas and florida the the slowdown feels more dramatic and stuff all of a sudden is like it’s it’s wild for me when the list side’s reaching out right yeah the list side

Are you guys gonna write an offer and and and builders are acting the same way it’s a sweet spot to be in as a buyer and you know like i i run the numbers every day as a math guy like i told somebody near you in in dublin i have a a buyer who the the builder came back and is offering the place at 1.57 that they were going to buy in february for 1.8 the funny part

Is i ran the math today’s rates at 157 same exact for all intents and purposes payment as yesterday’s rates at 1.8 so yeah you got to discount it by 230 because the buyer needs an all in piti payment of 8 000. yeah the payment didn’t change yeah right there you go and if you layer in the fact that like they might not even be cool with that eight thousand dollar

Payment even if you discount it you know because buyer sentiment sure oh buyers yeah it affects the market and interesting conversation i had recently too was that like the speed at which we’re getting information i think causes things to happen faster and that’s why um the run up the pullback in my opinion there were there were some mortgage people that saw it

All happening this year and i i won’t name any names i don’t remember who it is but like that was too aggressive too aggressive yeah you know you you see it as more of a 2023 pain and suffering and higher rates and then 2024 might be yeah is probably gonna be a good year because the the rates will come back and the economy will be healing itself we will i think

2023 god this is going to be pain i am not even sure i want to say this ah screw it i’ll say it anyway i think 2023 could be the worst year of my adult life economic wise and i’ve been through the dot-com crash i’ve been through the great recession i think this is going to be a combination housing depression and kind of dot-com with layoffs right snap just laid

Off 20 all of these things are kind of coming together it’s going to be a smorgasbord of yuckiness in 2023. okay yeah let’s talk about 2023 and what we talked about you know total home sales and stuff on another video yeah we’ll do that next one well do me a favor again the the one thing i want people to realize is if i’m right rates are going to seven uh if you

Like it lock it today because rates only get worse from here for a year um work with a professional if you want to talk about arms because again i think there’s going to be more and more people betting on rates um not a bet that i would make but hey who cares what i would do a lot of people will work with matt the mortgage guy how do you want them to reach out go

To greatmortgagebroker.com fill out the form and we’ll be in touch awesome buddy thank you very much

Transcribed from video
WARNING: 30 Year Mortgage Rates Going to 7% in 2023? OR Will they go to 4.%% as Fannie Mae Predicts? By One Rental at a Time