The number one question I get from people is now a good entry point into the market.
You guys are the only person that can really make up that decision.
But what I want to discuss right now is basically how much the market can.
Correct.
And basically when, but to find out that data, we have to go a little bit
back in time because the mainstream media and a lot of YouTubers
out there saying, the crash is coming.
But they've been saying that basically since the beginning of 2020.
So what I thought I would do is I would go back and get some historic data to figure
out from 2020, if you would've bought in 20, 20 or 2021, where would you be today?
And then let's look at today's numbers to figure out, is there affordability
in the housing market or not?
So that's today's discussion.
So what I thought I'd do is I go back and figure out where we were
at this time of the year in 2020.
And the same thing in 2021.
So the first thing I wanna see is what was the median price
of a home back in those days.
So we go back to this chart and we can see right through here.
I'll try to find this for you.
Is Q1 of 2020.
Let's go to Q2 of 2020.
So the average house price at that time was 320 2006.
Okay.
So I'm gonna put this all into chart here in just a minute.
So then we go to Q2 of 20, 21.
What is that price?
Q2 of 20 21 380 2,600.
Okay. So then we continue up to.
Q2 of 2022, holy Nike, that's a major increase.
That is 440,300.
So those are our entry points on what the price would've been for that home.
So now what we wanna do is we wanna go back in time and I know you can't
do this, but amuse me for a second.
Where were mortgage rates?
Q2 of 2020.
So we go back to our handy dandy rate sheets, August 20th of 20.
So we're gonna look at a rate at 3.06, 3.07.
It bounced around a little bit there.
Okay. So 3.07.
I'm gonna say that's the norm there.
All right.
The next piece of the puzzle is Q2 of 2021.
So let's go to Q2 of 2021.
We're gonna see a rate at 2.94 2.9 4 2 8 5 2 8 4.
Let's go 2 8, 5 on that, just for hypothetical reasons.
And then what is the rate today?
On the rate today, I can go up to this piece and we can find
out the rate today is 5.84.
So let's put all this in the context.
Let's put this onto a spreadsheet and break it.
So in Q2 of 2020, we saw prices at 322,600 rates were 3.07, putting your
principle and interest payment at $1,331.
Okay.
That's cheaper than what it be would be to rent in these days.
Q2 of 2021, we solve prices go all the way up to 382,000 600.
The rate was 2.85 putting the payment at 1530.
And then we push it all the way out to where we are today.
Q2 of 2022, we see house prices at 440,300 rates at 5.84, put your payment at $2,516.
It's almost double where we were two years ago.
So let's put some of this in the context.
If you would've bought a house in 2020, when everybody was saying
don't do it because the market's gonna crash and you sat on the
sidelines maybe you couldn't find.
That's a legitimate argument as well.
But what I'm trying to do is if you guys don't get my agenda yet, I'm
trying to debunk all those sheep that are following these people that you're
just preaching a false narrative.
Okay.
So if you would've bought a house in 2020, where would you be today?
Where your house values based on, I just give you all the information is up 36%.
36% from where we were just two years ago, that's nuts.
I haven't seen house prices move that much.
I can almost say ever other than in 2008, but there's a huge difference
between 2008 and today, and I have several videos going over that.
So if you've been sitting on the sidelines for the last two years, you missed out
on a 30% run in the housing market.
So what does this tell us?
I agree with you home affordability at this point is.
But to rent the O the other option that you have is to rent.
So you guys, what you need to do is if you think you're ready to purchase
a house, you need to talk to a lender to figure out what you can do.
And that's what we can do for you here.
And you need to talk to a realtor to figure out is it cheaper to rent
and to buy into your specific area?
Everything is localized.
Okay.
My market here in Chicago is much different than it is in Orlando or
Austin or San Diego, but let's go back also and look at this data.
So we've seen house prices run up almost 40% in two years.
So if you look at that data, If you, we have a market crash,
where is it gonna crash to?
And to what extent, the other piece of this puzzle is the when.
Okay.
So let me give you my feedback.
I think houses prices at this level are gonna just stagnate because the supply
isn't there, it's coming and it's coming dramatically as how constructions get
put into place at the end of this year, because when supply chains and everything
else fix themselves at the end of this year, we're gonna have a lot of homes.
So if I'm a home buyer, I'm probably gonna sit on the sidelines.
I'll probably stick my toe in the water right now just to see the temperature
of my local markets, but I'm probably gonna hold back a little bit and see
what happens in Q4 this year, because we're gonna have more supply coming
to the market and demand is what the federal reserves trying to do
is they're trying to halt to demand.
So at that time you might be in a sweet spot.
If you haven't bought yet. But these numbers, if you've been sitting on
the sideline for the last two or three years, because you've been
following those out there that are just preaching the false agenda at that
time of home, ownership's gonna crash.
You missed it.
Okay.
Now what the market's gonna do from here to the future, I can
honestly say, I don't know.
Okay.
But what I can tell you is mortgage rates should basically
stagnate at this, these levels.
It ran up too fast too high, too fast.
Okay.
We're teetering on a recession.
I'm gonna go over the economic news here in just a
minute to show you the jobs.
Market's still pretty darn good.
There's a lot of job openings and we're gonna start seeing
inflation start to taper down.
That's gonna make another market shift on where rates are gonna come
down a little bit, but the home affordability is still as you see.
House values are almost 40% where we were two years ago.
What's gonna happen in the future.
I honestly don't know in that piece of the puzzle, but again,
you guys have to do your data searches in your local area.
Please talk to a mortgage advisor.
That's what we would love to do for you.
And also talk to a realtor because everything is localized.
So now the main reason why you're here, what the heck's going on with
mortgage rates, because as you saw in my last chart house payments
basically almost doubled in the last two years, putting home affordability.
I agree out of the reach of millions, but also the other flip side of that coin.
Do you know, rents are up about 20% in the last two years, so that's
your alternative, but based on this, let's figure out when more
mortgage rates are gonna go, because that's a piece of the puzzle that
I monitor.
So the first economic piece we have today's GDP was confirmed at the,
in its second review right now.
And they've adjusted it from a point negative 0.8 to a negative 0.6.
I'm sorry.
We were at negative 0.9.
The estimates were to come in at negative 0.8.
They actually came in at a negative 0.6.
So that means we are officially, we had two quarters of negative GDP.
The other piece of the puzzle is look at the initial jobless claims.
So here's what I thinks really going on with the jobless claims and
job claims in general and so forth because the data's a little bit
conflicting, but if you really dig into it, here's what you're gonna see.
You're starting to see a lot of people getting laid off or quitting their job.
So initially what they do is they come outta that job and
they go into the initial.
Okay.
The initial jobless claims, but what's happening.
We're seeing is that number isn't really correlating with
the long-term unemployment rates.
So what the analysis is, or we're expected to be is people are losing
their job going on short term jobless or unemployment claims.
And then soon after.
They're finding jobs because there's two job openings for every person looking.
So this is basically the economic news we have today.
That, so based on that information, what's going on with mortgage rates.
Here's what we do.
So what I focus in on a daily basis is the immediate reaction that the market's
having on the data that we presented.
So what I look at is the mortgage back securities market.
You can see it right here.
Flat because the GDP can number came in actually a little bit
better than what they expected.
And the initial jobless claims were actually lower than they expected as well.
So that is basically telling the market we're okay at these levels.
Okay.
We have no adjustments in the MBS market based on today's news, but
let's see where mortgage rates are.
Basically.
This is where we were at the end of yesterday.
So these are the adjustments that took place yesterday.
The MBS markets were way down yesterday and we see across the board here,
you're seeing about an eighth of a, of an increase in mortgage rates, but the
shocker here not too long ago, we had the 30 year fixed right in this column
rate here was at 3.25 were, or I'm sorry.
5.2.
We're 5.84.
And that was only two weeks ago.
So rates are starting to rally once again, but again, the federal reserve chairman
is speaking in Jackson hole to tomorrow.
I think it is yes, tomorrow.
And a lot of the news that he gives out at that the con that conference
is gonna be a worldwide event.
So we're gonna pay attention, close attention to that data that he provides
us tomorrow to get a direction on.
Fed's next steps are.
So if you like my content, you're like, Hey, Dan, I'd really to reach out to
you to see how you guys can help us.
What's the best way to do that?
All you need to do is go over to TheRateUpdate.com.
I'll get my big head out of the way.
and here it is, you can do a whole bunch of things.
As you can see here, you can now chat with us live and Nico is live online right now.
If you'd like to speak with him. You can also reach out to us by calling (844)775-5626
or we do have this feature too.
I love this and this book's up usually every day, how you can book a meeting
and we'll do a zoom event with you.
Live one on one to discuss your unique situation.
So that is my report for today.
My name is Dan Frio.
I do this every day.
I hope for you to join us tomorrow.
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Thanks for watching guys.
I'll see you tomorrow.
Bye-bye.