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Could Rising Rates Bring More Home Price Cuts? | Barry Habib

Market Insider

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National home prices rose in July even as mortgage rates climbed over the spring and summer. Mortgage rates have moved higher since, and the Fed raised its benchmark rate in September. How much more pressure can home prices absorb?

Higher rates squeeze buyers, but borrowing costs alone don't explain why prices have held. What has kept prices up is being tested again. Buyers still face expensive borrowing with no certainty that waiting will bring lower prices.

Barry Habib, founder and CEO of Highway and a member of Fannie Mae's board, examines why home prices have held up so far. He also considers what further rate increases could mean for prices.
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00:00 Intro
01:26 Why mortgage rates are rising
04:46 When rates could finally ease
06:25 Is inflation being misread?
10:26 Housing has two different stories
12:20 Could home prices pull back?
13:18 Why supply still matters
16:49 Is affordability overstated?
19:32 The rental market has slack
22:46 Why builders won't flood supply
23:42 Why buying can still work
27:40 America's 30-year advantage
31:57 What adversity revealed
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𝘛𝘩𝘦 𝘷𝘪𝘦𝘸𝘴 𝘦𝘹𝘱𝘳𝘦𝘴𝘴𝘦𝘥 𝘪𝘯 𝘵𝘩𝘪𝘴 𝘷𝘪𝘥𝘦𝘰 𝘢𝘳𝘦 𝘵𝘩𝘰𝘴𝘦 𝘰𝘧 𝘵𝘩𝘦 𝘨𝘶𝘦𝘴𝘵 𝘢𝘯𝘥 𝘥𝘰 𝘯𝘰𝘵 𝘯𝘦𝘤𝘦𝘴𝘴𝘢𝘳𝘪𝘭𝘺 𝘳𝘦𝘧𝘭𝘦𝘤𝘵 𝘵𝘩𝘦 𝘷𝘪𝘦𝘸𝘴 𝘰𝘧 𝘔𝘢𝘳𝘬𝘦𝘵 𝘐𝘯𝘴𝘪𝘥𝘦𝘳. 𝘛𝘩𝘪𝘴 𝘤𝘰𝘯𝘵𝘦𝘯𝘵 𝘪𝘴 𝘧𝘰𝘳 𝘦𝘥𝘶𝘤𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘱𝘶𝘳𝘱𝘰𝘴𝘦𝘴 𝘰𝘯𝘭𝘺 𝘢𝘯𝘥 𝘴𝘩𝘰𝘶𝘭𝘥 𝘯𝘰𝘵 𝘣𝘦 𝘤𝘰𝘯𝘴𝘪𝘥𝘦𝘳𝘦𝘥 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭, 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵, 𝘰𝘳 𝘭𝘦𝘨𝘢𝘭 𝘢𝘥𝘷𝘪𝘤𝘦. 𝘈𝘭𝘸𝘢𝘺𝘴 𝘤𝘰𝘯𝘴𝘶𝘭𝘵 𝘢 𝘲𝘶𝘢𝘭𝘪𝘧𝘪𝘦𝘥 𝘱𝘳𝘰𝘧𝘦𝘴𝘴𝘪𝘰𝘯𝘢𝘭 𝘣𝘦𝘧𝘰𝘳𝘦 𝘮𝘢𝘬𝘪𝘯𝘨 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘥𝘦𝘤𝘪𝘴𝘪𝘰𝘯𝘴. 𝘚𝘰𝘮𝘦 𝘭𝘪𝘯𝘬𝘴 𝘪𝘯 𝘵𝘩𝘦 𝘥𝘦𝘴𝘤𝘳𝘪𝘱𝘵𝘪𝘰𝘯 𝘮𝘢𝘺 𝘣𝘦 𝘢𝘧𝘧𝘪𝘭𝘪𝘢𝘵𝘦 𝘭𝘪𝘯𝘬𝘴.

#realestate #homebuying #houseforsale #personalfinance #marketanalysis #mortgage

19 Comments

@Sweetiepie-d7r 1 day ago

The guest says 1.5M new household formation vs. 1.1M new units, but where he fails to take into account: some new household formations come from 2 people that each owns a unit; annual number of death that creates new inventory. The math is nuanced.

@LoveIsABattlefield69 1 day ago

Good insights, thanks

@nvideos-bn1mn 14 hours ago

Great ❤

@Vanfrompoint 1 day ago

He is trying to shift the narrative for his industry . Why can’t he just answer the supply question?

@Kimo24-r2j 5 hours ago

There's a shortage of homes, yet builders aren't building because they don't think the home will sell. While vacancies for rentals hover at highs. Maybe there's no shortage of homes.

@claudioramirez5726 9 hours ago

I see what hes saying. But the Dallas Feds single data point cant dictate monetary policy. The real average Américan is definitely feeling the downturn right now. And everything that goes up eventually goes down.

@CarlSpackler-e4d 1 day ago

It will either lead to lower prices...or an even more dysfunctional market.

@Sweetiepie-d7r 1 day ago (edited)

The medium income vs medium home price is a stat that has been used since real estate math has been applied to forecast housing. It is measured against historical averages. I believe the guest is wrong to move the yardstick to validate his proposition. There is a reason home sales and prices have been stagnant for 3 years.

@sambistabeauty 18 hours ago

25:00 flawed logic: no you also have minimum $600 per month HOA fees in California can be up to $3000 per month!AND PROPERTY TAX AND REPAIRS AND MORTGAGE IS NOW TWICE THE COST OF RENT AND YOU CAN'T GET A ROOMMATE BECAUSE CALIFORNIA ENCOURAGES SQUATTING AND THEFT

@Vanfrompoint 1 day ago

Hard to follow

@CBBC435 19 hours ago (edited)

Oil prices are not behind inflation. Inflation, by definition, is dollars in excess of productivity. There is a difference between price and inflation. It's like he's trying to play a concerto for violin with one worn bow hair in absense of the orchestra. Very hard to listen to.

@BorselinoThadchack 16 hours ago

barry is wrong on the math of buying a house. Why? because his thinks $500K mortgage is a better growth than stock market. Sure, theoretically. Bun in practice he disregards HOA fees, Taxes, realtor fees, etc (called friction fees). Where as index fund investing (vanguard, fidelity, etc) is almost $0 friction. But again, he sits on the board of FANNIE MAE, therefore it is an interest to him for housing to go up . Bottom line? it depends if you tend to stay in that house for 30 years.

@romangabriel007 6 hours ago

So this clown thinks I should pay 12,000 a month for a house in the Bay Area that I can rent for 4,000 a month? What a joke this guy is.

@hobarttobor686 1 day ago (edited)

Mortgage rates are an interest rate...oil has nothing to do with inflation, inflation is caused by increasing the money suppy

@Lombardi54 1 day ago

Amazing interview. The guest is so smart, honest, knowledgeable. Thank you sir to both of you.

@vladimirdiaz8623 1 day ago

Barry Habib 👏🏼👏🏼👏🏼 very knowledgeable and excellent communicator! Thanks for sharing your story 🙏🏼

@1freedomoffgrid 1 day ago

So i'm expected to lower my price cause interest rates went higher? how is that supposed to work? No, if anything, it makes me less likely to want to sell the house to begin with.

@CurtisLoew-q7q 1 day ago

We always (99%) have prices go down this time of year. What does Barry say about 1 year, 3 years, & 5 years. Will prices be higher in 2030? I have been saying since 2018 that the answer is “yes.” We are talking single family residential houses. Existing. 🏡🏡🏡🏡🏡