The Jon Sanchez Show

08/27-What may happen to the housing market if rates continue to decline?

With mortgage rates trending down and even lower rates being expected in the next 1-2 years, what can we expect from the housing market? This afternoon on the Jon Sanchez Show at 3pm, we’ll discuss 6, very likely scenarios you may want to consider if you are a buyer or a seller.

Duration:: 35m
Broadcast on:: 29 Aug 2024
Audio Format:: mp3

What's next? At Moss Adams, that question inspires us to help people and their businesses strategically define and claim their future. As one of America's leading accounting, consulting and wealth management firms, our collaborative approach creates solutions for your unique business needs. We leverage industry-focused insights with the collective technical resources of our firm to elevate your performance. Uncover opportunity and move upward at MossAtoms.com. Good Tuesday to you, welcome to the John Sanchez Show on Newstalk 780K, which it's a pleasure to be with you and a pleasure to be with my co-host around the horn. We shall travel. Coria, David, Drility. How you doing, Big C? I'm doing fantastic. How are you? Very well, my friend. Very well. Very well. Dwight Millard. Killed mortgage. How are you? Well, I have borrowed a cell phone, so I don't know. I want you to have a show. My goodness. Let's tell the audience what we're talking about. Dwight emails me right before the show. He's like, "I know AT&T is out of my area. I don't know what I'm going to do." And I said, "Well, we'll just keep going till you get on." That was good thinking. Do I borrow somebody else's cell phone? I like that. Yeah. Now I've got to go see what's going on or whatever. Anyhow, I'm here and it's a good day. Indeed. Glad you're with us, my friend. Glad you're with us. I always want you here. All right, folks. Let me tell you what we have lined up for you this evening. We'll give you a market recap, and it's going to be a short one because it was a boring session today. Just not much conviction. We've got, of course, a holiday weekend coming up, and a lot of investors, again, for some strange reason. They're just sitting on the sidelines ahead of tomorrow's NVIDIA earnings numbers after the close. It's like we're getting a Fed interest rate decision. That seems to be how important this earnings report is. Stock did pretty well today of NVIDIA, but the rest of the market, like I said, very, very lackluster. So we're going to get through that very quickly. Like I said, and get a head start on tonight's topic. As all of you know, mortgage rates are on the decline. They're down. They're even lower. They're expected to be even lower than where they are now in about one to two years, because, again, as we discuss every night on this program, the anticipation of the Fed continuing to cut rates starting in September and then continuing forward for the rest of this year, with maybe two to three, depending upon how many economic reports you look at, I'd say two, including September would be very doable, but three, maybe pushing it. But then many more next year. Like we said last night on the show, Jason and I, this should be the beginning of many, many rate cuts to come. So therefore, what can we expect from the housing market in this type of declining interest rate environment? So this afternoon, what we're going to do is we're going to discuss with you six very likely scenarios that you may want to consider. And we're going to kind of include both of you if you are a buyer or if you are a seller. Now, do you know, tell me before I get to the stock market side, just real quickly here, what's the pulse you're seeing right now with these rates down? And again, folks, let's put this in perspective before Dwight answers that question. As I said on the show last night, we go back to October, we're knocking on the door of 8%, we're about 7.91. And as Dwight will tell you, we're at 642 today, according to mortgage news daily on the 30 year mortgage. So significant decline from where we were in October to where we are now and again expected to go lower. But Dwight, what's the activity? What's the fever out there at this point with people? Well, I mean, I think you're definitely starting to see some people, you know, come out behind closed doors. You know, just because you're seeing a new cycle, right? They're saying, hey, rates are down, rates are going down. You're expecting, you know, so depending on what you're reading or hearing, you're going, okay, this is, this may be the opportunity that I've been looking for. And so you're starting to see, I do start, I do believe you're starting to see activity. You're even starting to see a little bit of refinance activity. But I think that that's going to be a little more delayed just because, I mean, it's going to be hard to treat, hard to trade off your three, your three and a half or something else right now. But anybody with a seven now, there, you know, their ears are perked up. They're going, okay, wait a minute now. You know, I mean, I might be able to get in the fives and then, but people will start to wonder how far this can go. So there's where the lag might come in. They might just want to see how far this can go. But, you know, John, I've seen a lot of discussions now. And I'm sure you talked about it, unfortunately, I missed third, but you, you know, this defense got behind again on this, right? I mean, with the, with the data, they got behind that curveball. Yeah, now we could have been saying they should have started lowering rates. You know, when we said they should have started raising rates and inflation wasn't transitory. That's when they should have been, and they should have started lowering rates maybe four months ago or so, you know, some like that. I'm sure you've been talking about that. Now you're, to your point, they're saying, okay, now they're behind and they may just do a blitzkrieg of quarters, quarters, half, half. I don't know. So I mean, this, this could be the beginning of a pretty, pretty strong fall, winter season. You haven't seen him in quite some time. Yeah, that's right. Corey Edge, do you agree with that? If they get super aggressive in lowering rates, I don't think they'll, I'm with you. I think maybe they'll might sneak into this year, one for sure, kind of go from there, but I don't think they're in any hurry to bring them down. Super crazy good. I remember the norm isn't the two percent, the norm is pretty much where we're at. Maybe a little bit lower. There's no reason to get crazy and bring them down to levels. We don't need to be. But Corey, here's the million dollar question, and that is, as a real estate broker, you hear and you talk to these people different than Dwight, right? They're ready to do something when they're meeting with Dwight. You're talking to them. They may be ready now or they may be ready in six months to buy or sell. So how much anticipation do you think people are going to be withholding at this point, saying, as you just mentioned at the beginning of the show, saying, okay, so here we are again at 642. You know what, I'm going to hold off to buy until we're sub-six percent or five and a half percent. I mean, you know the way people are. We're all greedy and we want to get the best deal that we possibly can. Do you think that can happen? Because I have seen this guy, just as you have in our tenuous careers, that people will just, even though you're on a trend down on these rates, they may go, I think they're going to go lower, so I'm going to wait, and I'm going to wait, and I'm going to wait. And then, again, if the Fed's doing this in quarter-person increments, it could be a while before they start to see rates down to their target level. Is that possible, Corey, in this environment? Sure, but I think you have two different kinds of buckets of buyers right now. The ones that don't own a house that have been in the market looking for some of the buyer for the last couple of years, and Dwight can attest to this. It's been a pretty busy year right now. People haven't really been waiting. They were buying when it was seven and a half. They were buying when it was higher. They're going to buy when they're six, six and a quarter, whatever that. The activities have been strong. The ones that I see will wait are the ones that are in current mortgages at 3%, 4%, whatever it may be. And we've talked about what's the magic number to get them to sell. Those are the ones that will probably wait for that magic number. But that inventory that comes on the market, when that happens, may not lead to the end result that everybody thinks it does. You've got to look at the whole global scheme of it. Interesting. Dwight, add on to that. Well, I think it's going to Corey's point. I think the proof is going to be in the pudding. I think whatever buyer perception is is going to dictate how aggressive they're going to go out and buy. This may be a little longer delay of benefit, of rates falling than you would think, just because of how high they went and where people got stuck at. And if they start getting aggressive, then they say, "Okay, we're going to drop it two times." And then people are just going to sit back and wait. And it may have just a complete different outcome than what we're sitting here thinking. I'd like to thank that right now, there's so much pent-up demand to get into a house. If you can qualify with lower rates, but I'm not sure you're going to see that. But that's my feeling. So real quick, guys. Dwight, specifically to you. So where do we sit right now as far as when it makes financial sense to either wait or refinance? Let's go the refinance side of it because you perk my interest on that. For example, someone does have a 7% 30-year fixed mortgage. Is now the time at 6.42 where financially it makes sense, or is it 6%? Where's the parameter right now? In my humble opinion, John, I think you've got to pick up at least a point and a half. I think you've got to get down somewhere around the 5 and a half. That's going to be how we say historically. I know there's others that say 2% in this net. But if you've only been in here, keep in mind, if you've got a straight Fannie Mae FHA VA loan, there is no prepayment or accelerated penalty. So you can refinance anytime. The lenders get a little nervous if you do it within six months, because then we get these early payoffs, which you might start seeing those. So I just think you're going to see 5 and a half, 5.6. Somewhere in that range before people will start going, okay, they're not going to go much lower, so therefore it makes sense for me to pick up a point and a half. Why not? And so I think that's going to be seen maybe over the next couple months. And so that's why I think you see a lot of refis coming in. You'll start to see a few people. What you will see, John, is applications for refinances, because there's no cost. The muzzle gets you in the system, gets you ready, and be proactive rather than reactive. So that's what you might see. You might see an uptick in applications, more specifically, refinances, just for people to be proactive rather than reactive. That's a great point, Dwight. And we will get that data tomorrow. I will cover that on the stock updates tomorrow morning when we get that from the Mortgage Bankers Association, how the application activity has been in the previous week. It's a good point, guys. Good point. All right, let me get to the stock market setting. I'm going to squeeze this in before we go to break. So like I said, very lackluster session. Didn't mean we didn't have a lot of intraday volatility. Just like yesterday, we had a lot of intraday volatility, but didn't really finish anywhere. We finished just with a gain of 9, excuse me, 10 points on the Dow to close at $41,250. Nasdaq rose 29, the S&P higher by 9. On the commodity side, we lost 2.3% on oil, $75.61 a barrel, $2.30 to climb in gold, $2,550, 290. And Dwight, a one basis point increase on the 10-year at a yield of $3.53. Again, I kind of let the cat out of the bag. So if I ask for your forgiveness on that, $6.42 on the 30-year down one basis point. So it didn't budge either. No, but John, what's encouraging is if you look at the VA and the FHA on that mortgage used daily, 5.86 on FHA, 5.88 on a VA. So I mean, for those government buyers, the ones that are going VA's, I mean, Johnny, you talk about a VA jumbo or something like that. I mean, what a phenomenal rate. So I mean, yeah, it's definitely starting to lean in towards their favor right now and towards the buyer. Absolutely. It's a 15-year fix now at 5.96. Yeah, I mean, that's exactly what I wanted to get to your point. What, eight, six, seven months ago? I lose track of time. We were talking eight. Right? We were going toward eight. Yeah. Yeah, exactly. Corey, all I can say is, brother, you better get a lot of good rest and sleep these days. Because I think to your point, you're going to have a busy or winter season. I don't think you're going to see much let up. I really don't. We'll see. For your sake and other real estate professionals, I hope I'm right. I'm right on that one. Yeah, you're right. That's right. That's right. Good point. All right. So I got the stock market side out of the way. Told the beginning. Again, market is kind of flat right now, ahead of the three-day weekend. And NVIDIA's earnings tomorrow. So that's about all I have on that side of things. So now we got a lot of time that we can talk about our topic tonight. Again, if these mortgage rates do fall, several things can happen to the market, housing market, that is. What are they? We're going to outline them for you when we come back in early start. Let's turn it over to Kristin Snow in the right now at traffic center. Good afternoon, Kristin. How are you? Welcome back to the John Sanchez Show on Newstalk 780KOH with Dwight Mallard of Gil Mortgage. Cory Edge, of course, of Edge Realty. Once again, a very benign session today, just a 10-point game on the dial, Rose 28, excuse me, 29 on the NASDAQ and the S&P, also higher by 9. All right. We're going to get to our real estate topic tonight. But before we do a couple of housekeeping notes. Hey, we've got our next webinar coming up for you September the 4th. So just a few short days. Mark your calendar. 6.30 p.m. September the 4th. Perfect timing, of course, to wrap up your day after work with some invaluable advice. Myself and Jason, we're going to walk you through strategies to secure your financial future. The title of our webinar, "Worryed about Market Volatility, Affecting Your Retirement." Well, after this webinar, you will not be. So we're going to walk you through strategies to secure your financial future, even in a volatile market, which if you don't think we're going to have that, you're going to have that going forward, then you're wrong. We will have volatile markets. You need to learn this. Learn how to assess your risk tolerance. Learn about diversifying the investments, establishing safe withdrawal rates, and how to make your investments last. Plus, we're going to help you create a contingency plan for those unexpected financial surprises that life throws our way. Reserve your spot now by going to our website at sancheswealthmanagement.com. Again, that will be "Worryed about Market Volatility, Affecting Your Retirement" webinar. This coming September the 4th, 6.30 p.m. at sancheswealthmanagement.com. Guys, before we get back or get started on our topic, I want to share something with everybody, including you guys and I did not get a chance to prep you for this because this came later in the day. So, I may mention, I don't remember if it was with you guys or with Jason, I don't know, probably three weeks ago, that as a business, and I don't know if over a year, if you've had to do this before, we get notified by the Census Department that we have to fill out a census on our business environment. And so, I fill it out and they go through a number of different questions. Well, this is the first time I've ever got the results. So, I filled this data out for, you know, for our firm, and this collection period, let's see, who in was this? Back in, oh, I got it. I think I did it in July, if I remember. So, this data just came out. But what was interesting about this guy is, on this chart, and I'd be more than happy to send it to anybody, one of the data points that they emphasize a lot on this report is the results of the latest Census data, is what's called the current performance by sector. And so, the question that all of us business owners were asked is, overall, how would you describe this business's current performance? And it's based upon your NAIC code, which is a code that we all have that tells the government what line of work that we're in. So, I started going through this, guys, and all it is, basically, it's a chart. And it's a chart that goes back, basically, back to October of last year. And they assign a reading to it. It looks like the reading starts at 60, and then drops all the way down to zero, right? So, basically, it's a current performance of businesses around the country. Guys, I went through this, and there's, let's say, three, four, five, six, seven, eight, nine, 10, 11, 12, 13, 40, 50, and say, looks like about 16 different industries. That they did the survey on, every industry that I pulled up, every industry, the graph is going from upper left to bottom right. Not severe, but a very slow, steady decline. The only industry that I saw that actually went up was leisure and hospitality. That graph actually went up a little bit, as well as I should mention, educational services just blooped up. But don't you find that interesting, that so many different industries, again, they're all saying that the business side of things is slowing down. So I thought that was kind of fascinating. Corey, what do you think about that report? Is the question surrounding kind of your sediment, like what you feel that's happening? Yeah, that's great point you bring up. So I believe where they garnered this data, and again, it's called current performance by sector, they asked us a number of different questions, and a lot of it did not pertain to us like what's your inventory level? Well, we don't have any, so we say not applicable. So I think this Corey is a culmination of different questions, and I can't remember how many there were 15, 20, there were quite a few, and I think they take all of that and then they lump it together and give us this current performance by sector. So I think it's all of the questions they ask. They lump it together, probably assign some type of a score to it, and then they graph it. Well, and it is interesting too, right, because that's what you hear when you're watching the stock market stuff during the day, you don't hear it so much, but when you talk to people on the street and small businesses, like the three of us have, you know, you hear it out there. And I wound up when Chairman Powell was speaking last week, and he was kind of making jokes about transitory. And this and that, to me, when you sit back and think about it, you know, all these interest rate increases, haven't really done anything if you're just looking at the economy a little bit of rise in the unemployment, businesses are still profitable, everything else is still profitable, but you know that there's something kind of brewing underneath their hands with that. Yes, that's my point. Thank you. Yep. That's my point. Exactly. The long variable limits. Yeah. So let me, let me, I just, I was looking at this report as you were saying that, Corey, let me just real quickly go through this to your exact point. So I do see a percentage score to this. Okay. So, let me just run through these very quickly and you can see what I'm talking about here. So I found the time period it was September 20, or soon, July 29th through August the 11th was the survey period. Okay. So, mining down 3.08% again, down meaning, how would you describe this business's current performance? So mining, all the miners that they surveyed altogether in aggregate, they say their businesses down 3.08%. Okay. So now you get the picture. So mining down 3.08. Next one is construction down 1.39 manufacturing down 1.23 wholesale trades down 0.85 retail trades down 1.02 transportation and warehousing down 1.42% information down 2.07. Finance and insurance down 1.26 real estate, Corey down 0.85 professional services down 0.65 almost down here admin and support services down 1.46 educational services down 2.27 health care and social assistance down 0.56 three more to go arts and entertainment down 1.87 accommodation and food services. I was wrong. I'm sorry. The graph was wrong there. It was actually down 0.72. I could have ticked a little bit and then other services down 1.02. So out of all of these different sectors, again, they either you were very close to unchanged or you were down. So Dwight, again, to Corey's point, this shows again something kind of strange brewing under the surface. When you take all of these different sectors of businesses based upon the NIC codes, this shows something, does it not? Oh, yeah. Yeah. But John, we're in the trenches and we've been saying that for 6.00. Yes, we have. You know, and you just asked the red lobster or the big lot employees. You know, I mean, that's the problem. I mean, it's it's here and I'm hoping that, you know, the feds and everybody who has the ability to kind of change this course, you know, figures it out quicker. But that doesn't surprise me at all. What surprised me, John? Is it not bigger? Yeah. Well, you know, you know, I hear something else well real quickly. I don't know if you guys saw this on the internet, but you know, Mark Zuckerberg, of course, CEO of Meta, you know, he there was a big story. It was all over the new sites and stuff this morning. How he complained that the Biden administration basically censored Meta or Facebook at that point in regards to what they could really say regarding COVID-19 content. And he says, you know, in retrospect, I should not have listened to them. But my point of bringing that up is we've got to be careful, folks. You know, we, this show in my stock updates and all the data that these guys bring and Jason brings, you know, we're, we're regurgitating data that we've learned throughout the day, right? But we've got to be careful as to the accuracy of the data, right? You see things. Oh, things are great and everything else. But then you get a report like this and you go, eh, is it really that great? Right? I mean, let's go back to last week, guys. Eight hundred and what 18,000 fewer jobs than what the government really told us. So you know, again, you, you, you got to kind of just take, I know it's hard, but you know, when you're making your real estate decisions, your stock market decisions, you take all these little pieces right and you got to put this puzzle together and try to make it a clear picture. And that's what we try to do for you every night on this show. But, you know, it's nice when we can, you know, get down into the nucleus of some of this data and really, really, truly see what's going on. Because again, the government, I think many times does not tell us the true picture as Mr. Zuckerberg said today. All right. Sorry, Mr. Neff. It will turn it over to you. News traffic and weather. Sorry for the delay. Welcome back to the John Sanchez Show on new stock, 780k, which with core years of agility, Dwight Millard of Guild Mortgage, a 10 point gain on the Dow rose 29 on the NASDAQ and a gain of nine on the S&P. All right. Mortgage rates? Well, they're going to fall. At least that's according to everybody's anticipation of rates coming down. And again, as I said last night on the show, repeat it before we get started. There is really no direct correlation between what the Fed does as far as cutting rates, raising rates and mortgages, right? That's the mortgage rates up and down are a true byproduct of what goes on in the bond market and so on and so forth. So just keep that in mind as we go through this. But overall, as we said, things should be pretty down good. So we put together a list of about six things, how we think this can positively improve the real estate market. So Corey, let's start with the first one. Our increase in demand for homes, pretty logical here, lower rates, of course, mean reduced cost of borrowing, making loans more affordable, increased demand for the homes, people get off the fence, all those things that we talked about. Yeah. And we'll see kind of what that threshold is like we've been talking about because the biggest group we think, right, that is locked up are the ones that already have homes and got low mortgages. Traditionally, they're going to stay every seven years, but they stayed longer during a cycle because they've got really low rates already locked in. So, you know, is it 1% over that rate, 2% over that rate, there's going to be some number where they say, "Okay, enough is enough for a move because we're bored." Exactly. That could lead to a lot of demand and it could lead to, and Dwight, will attest to this, I've seen it ever, we've talked about it for two or three years now, the level of activity within the real estate sector has been very low. So that will probably lead to increased activity, may not lead to higher prices, but it'll lead to increased activity for everybody. Corey, while you're on that point real quick, what about the real estate investor? I'm not talking the primary home, I'm talking about the Geiergal or combination that want to get into their first rental property or maybe they want to add to their existing rental property portfolio. The rates, I mean, that's one of your main expenses, right, is going, a lot of them are going to have debt service. The debt service is going to depend on what the rate is and that's a tough number to pencil on the current environment. So it's going to be helpful, a lot of these two ones they'll sit back and say, "Okay, well, where are we?" And whatever market, are we oversaturated with apartments, just seen a lot of that in different markets? Where are the rents? You've got to kind of figure out where rents are and then to me, what we do right now is, we take them down 10%, 15%, something that we think might happen and can we still live with it? Does it still make sense but reduce rental rates? And if it does, then you can move ahead with it, knowing that you can have a better debt carry expenses. Exactly. Let's recap real quickly, Corey, and I pulled up your report from July. Let's recap just to kind of set the bar for where we are here locally, right? So in July, our median sales price, again, for Reno Spark, single family, excuse me, for Washoe County, median sales price, 610,000 up 7% from a year ago. The inventory, we had about 978 homes and a 2.2 month supply. So we could see both median price, active inventory, and go up in months supply of inventory, go down if the market reacts like we think it's going to to lower rates. Yeah, again, depending on how many you unlock of people that have not moved, that put their rehab sales on the market and everything you see, this is my opinion, everything you see is conjecture that, hey, you've got no inventory, you've still got a lot of demand, so it's forcing prices higher. So if you get a decent amount of inventory, which comes from these resellers that have not put their houses on the market, it should have a negative effect on that person. Not much. I mean, listen, I'm not talking about the worst-case scenario, but it's certainly going to cool things down. That report we had for last July, if you look at the July previous, that was the top of the market for that given year. So I wouldn't surprise me if we come down a little bit, going into the holidays, that would be completely normal. But to your point, if your own pal came out and said, hey, I'm doing 50 here, I'm going to do a 50 before the end of the year, I'm going to do a 50 in January, yeah, A, if everybody still has jobs, they might say, wow, mortgage rates are 4% again, we're moving. Right, right, right, exactly. Dwight Hinktide, I'm going to go to point number two with Corey, because it kind of ties into this, and then the rest of it's going to be, I love it's going to be yours, Dwight. Our second point, the higher home prices. So as you were just mentioning a moment ago, but let's go into a little bit more detail, obviously, market equilibrium, right? If there's supply and demand, if there is demand, the supply could increase, like you said, with people getting out of existing homes, going to another one. But again, price equilibrium. If we have enough people that jump in, so if Dwight sells his house and I want to jump right in, it's kind of a neutral effect. But overall, you know, when we have already a low inventory, not as low as we did, but still low, 2.2 month supply, where do you see Corey, the appreciation of homes? I mean, let's take our medium price here, just let's just round it down to 600,000. Where could we see, you know, no crazy number, because I know you never do that, but 10% up from here, 20% up from here, you know, based upon lower rates, where would you see that? I think if you keep the uneven equilibrium, if you have lower rates, still no houses to buy people still, well, it wasn't, of course, I mean, I think if you're moving up, you still have a lot of people coming into Reno from out of California, Texas, other places, they're paying cash and prices still look like that same old story we've been telling for 20 years is still happening. If you get, I want to say a flood, but if you get a lot of inventory that hits the market because those people are moving, if they stay in the local area, John, then it will be equilibrium because they're just going to buy out, so if it moves, if they decide to move on, then you'll have an extra house without a buyer for another house and other buyer steps in and that could kind of change things. But, you know, six months is a normal market, quote unquote, normal market, equal market. And if everything stays equal, then prices kind of stay where they're at, go up ever so slightly. I don't see anything that's going to skew it, you know, drastically one way or the other. So, to me, and I've been saying this for a while, maybe I've been wrong for a while, but if you could hold, you know, 600, 625, 630, maybe you drop into the high 500s during the holidays, but come right back, I mean, that's a great market to me. It doesn't have to go up 20% a year for people to have. Right. Right. Absolutely. Submit some census data, population wise, just in Washoe County, we're at 273,448. That's as of 2022, the latest data. And again, this is a chart that goes from bottom left to upper right, meaning it just increases every single year. So I know with our clients, I don't know about you guys. Yeah, we get some that move out of the area, but again, a drop in the bucket compared to, I think, to your point, Corey, going from point or house A to point or house B, all staying within the local area. So again, that equal living we're talking about, so interesting points there. Dwight, I'm sorry, we'll come back with you. Let's go to a refinance surgery. And when we come back from this break, let us wrap it up with Kristin Snow in the right now, Traffic Center. Welcome back to the John Sanchez Show on News Talk 780, COH with Corey Edge of Edge Realty. Mr. Edge, your phone number, sir. 673-6700. Dwight Millard, Guild Mortgage, phone number, sir. 1030-2022. Beautiful. My friends over at S&W Tractor, great time to go visit them, getting ready for those fall projects, excellent inventory, both tractors, they have incredible Coyote and all the implements located at 4880 East Nylon and Carson City Fund number 882-1225 and online at s&wtractor.com. All right, we've been talking about again what we can expect to happen in the housing market with rates on the decline, starting to decline nicely. All right, we talked about increased demand for homes, higher home prices. Now Dwight, the refinance surge, we touched on this briefly at the show, let's briefly go through some more details because I got a couple more points I want you to comment on. Yeah, so John, I think you're going to have to see a, like we talked earlier, 5.5, maybe even lower, but I went back and tried to find the numbers in 2023. I think we did about $1.4 trillion in business with no refinance. Keep that in mind. There was no refinance. So you're sitting there with a pretty healthy amount of people out there eligible to refinance if we get another 50, 75 basis point dropping rates. So I mean, you could start to see a pretty healthy refinance market kicking in. If you start to truly drop the work talk on the radio show, we're saying, "Hey, you're at 5.875. I think you're going to start seeing the activity of refinance just pick up," but it's going to be, and like I said, I think as people see it, maybe get a proactive situation on the reactive. John, I want to mention real quick, so people have a real perspective, on a $500,000 loan amount. One point swing and interest rate, up or down, is about $325 a month. 400,000. Yeah, 400,000. Yeah. It's very significant. 400,000. It's $260, you know, up or down in that. It's definitely significant amount of statements, a car payment in some cases. So, you know, it's worth it. It's worth it for people to take, and generally speaking, I'm going to encourage people if they start looking at refinance, stay away from the no-cost refinance, as all you're doing is trading off the cost for the rate. So just be aware, dude, do just your homework, get, try to get the best lowest rate, and typically the recapture period in that shouldn't be more than 10 months. It's less than a year, you know, whatever the cost of the refinance is, the true cost. We call them non-recurring closing costs shouldn't take that long to recapture. So, if everybody just needs to keep an eye out as he's ready to start this. Make it real simple. Just call Dwight and you'll get to get them ethically. Yeah. Yeah. That's easy to edit. All right. Dwight, let's go to the fourth point here, increasing housing market activity, but specifically construction of new homes, that type of thing. Now, I think that you're going to see, and here's one I asked you real quick, tell me what you're seeing as far as an increase in people that want to build new homes because they've been frustrated with inventories. But also, are you seeing an increase in the qualification letters, right? I mean, that's a tough question to answer. But let's say you're used to giving pre-qual letters, let's say, on average, if we pull all your clients for the last year, let's say it's $500,000, $600,000, $700,000. Are you seeing that number increase as prices increase? Because that's something else we get. Absolutely. Yeah, absolutely. And I do believe if you start to see rates go down, isn't going to signal, isn't the credit market going to be a little more accessible for a lot of these builders? Yeah. So I mean, yeah, I think you're going to see an increase and a pickup in new construction. I really think that if they can go borrow costs cheaper and it's a little more accessible, you know, why wait to build those 10, especially if you have a demand, especially if you're sitting at 2.2 month supply of inventory. Absolutely. Absolutely. I'm going to skip number five, shift them by our preferences, but let's go to impact on the rental market. I touched on this briefly with you. This could be a negative for those that are out there that are landlords, especially apartments, things like that, because rates come down, people are going, why am I throwing away $2,000 a month in an apartment rent when I go get a mortgage for $2,500, right? Correct. Yeah. There are a lot of people that are a lot, there are a lot of potential homeowners that are locked up in rental leases right now for the only reason being in the house to buy or they can't qualify for the house to buy. So again, I don't think it'll be a huge catastrophic downgrade, but there will be some people that transition out of those rentals because they never intended me there in the first place. Absolutely. Either one of you real quick in 30 seconds, when does it make sense to pay cash or finance when we get into this lower environment? I mean, I know the answer, but I want you guys to answer it. I mean, in my world, if you have the cash, pay the cash, try to drive a good deal and then call Dwight and refinance out of it. Ah, I like that. More negotiating power, right, Corey? More negotiating power, typically. Yeah. Love it. Dwight, 10 seconds. Yeah. Lower rates are coming. Stay tuned to this show. We're bringing you all the latest and greatest, John. There you go. We're going to keep you posted on it. Absolutely. Great times ahead, folks. Great job, fellows. We'll do it again tomorrow night on the John Sanchez Show. God bless. Have a great evening. This program was sponsored by Sanchez Wealth Management. The material in this program was intended as general information only and should not be taken as specific investment tax or legal advice. None of the information on this broadcast was intended to be a solicitation for the purchase or sale of any security. Further information is available by contacting John at santjesswealthmanagement.com or 775-801801. John Sanchez offers securities and advisory services through independent financial group LLC, a registered broker, dealer, and investment advisor. Member FINRA SIPC, securities only offered in states John Sanchez is registered in. Sanchez Wealth Management LLC and independent financial group LLC are unaffiliated entities. Dwight Mallard is not associated with Sanchez Wealth Management LLC or independent financial group LLC. Dwight Mallard, co-host, NMLS number 241259. Guild Mortgage Company Equal Housing Opportunity, NMLS number 3274 Dwight Mallard, NMLS number 241259. Envy Mortgage Company number 1141. Pranch address 5370 Kitsky Lane Suite 101 and 103 Reno, Nevada 89511. Phone number 9723812410. The information provided today is for educational purposes only. The position strategies or opinions of the show do not necessarily represent the position strategies or opinions of Guild Mortgage Company or its affiliates. All information loan programs, interest rates, terms, and conditions are subject to change without notice. Guild Mortgage offers Home Loan Financing only. Guild Mortgage Company is not affiliated with the John Sanchez show. Any speakers, companies, or institutions featured. This is a paid advertisement. What's next? At Moss Adams, that question inspires us to help people and their businesses strategically define and claim their future. As one of America's leading accounting, consulting, and wealth management firms, our collaborative approach creates solutions for your unique business needs. We leverage industry-focused insights with the collective technical resources of our firm to elevate your performance, uncover opportunity, and move upward at MossAtoms.com.