HOUSING BARRIERS: Real estate expert has bad news if you're moving #foxbusiness #bigmoneyshow

Well, it's about time some good news for homebuyers stubbornly high mortgage rates continue trending down again It's a trend. They're still high, but they are falling to an 11-month low this week six point three five percent Much needed relief Americans who moved in 2024 are facing the highest monthly mortgage Payments in decades and it keeps getting more expensive to own a home a new survey reveals home ownership costs rose 26% since 2019 Mauricio, this is your baby here. It is is this move and again? I don't want to discount its importance. It was it was over 7% just a couple of weeks ago now It's six point two or six point three. Is it is it enough to really move the real estate market? It's not we need to continue to make housing more affordable It's too expensive right now to own a house the dream the American dream of owning a home is is impossible for any Normal person earning a normal living to afford buying a home into living in it That needs to occur through multiple different fashions. It has to occur through Lowering of interest rates. I think that's super important But there's also some tax benefits that I think that are out there that we can do we are experiencing right now The for three years in a row now the lowest transaction volume in real estate transactions that we have seen since 1994 Okay So when you realize that that's when you realize that there's just nobody's moving and why is nobody moving because they can't afford to buy And they also can't afford to sell because the people that are selling are coming off of really low interest rates holding on to you Know really low affordable pricing and they can't afford to go into something new something better something bigger Even mortgage at three times what they're paying now, even if they're downsizing right there They're still paying more for their their their home With the new mortgages and they weren't before right? So we just need to find that balance We need to find that middle we need to we need to promote Homeownership, we still need to make it more affordable and that at the end of the day. That's the bottom line the triggers Fortunately or unfortunately our interest rates and and Jackie we're trying to rebuild the family in this country which has been through a lot over the past couple of decades one way is to have when when Married couple invest in the house together that that brings them together And and I know a lot including members of my family who are both of the parties are working in the house They have kids They they have an income of six figures $200,000 and it's still not enough to buy a house Yeah, and a lot of young families believe that they shouldn't really start their family in earnest until they have a place to live That's not everybody but that is some people and so that affordability then becomes an issue if we can't afford to have a place to live to raise Children should we have them or not? It starts to get into greater philosophical issues But what's interesting to me is I look back during kovat when the mortgage rates were low and the prices skyrocketed The demand was out there in the suburbs everyone wanted to leave crowded cities or go to greener pastures and they did the prices went up and I understood that then when The mortgage rates went up. I expected the prices to come down because historically that's what we've seen yet for some reason Many of the sellers are being obstinate I suppose it's to your point that they can't go buy something else Even if they're downsizing they'd be paying more than they would if they stay in their bigger house And so that creates a really strange Quandary because a lot of these people can afford to stay put so they put their house on the market at their dream price They don't get their dream price. They pull it off. So what will be the catalyst to change this? Is it gonna be rates dropping? There's multiple things that are gonna be happening and you're so right during kovat what we have we have two things We had one one which was low interest rates, but we also had an infusion of a lot of money. Mm-hmm, okay Both of those things created for people just to start buying And then they're holding and then they're holding on to these incredible interest rates Now you had the interest rates rise and then you had no supply the law of supply and demand didn't match, right? There was some demand also some low demand because they were also hanging in there, but now we've got a pimped up demand Okay, so on the demand side, we're actually starting to get into a good situation. The supply sides were still tight We have no supply the way we're gonna unlock supply is by lowering interest rates just a little bit Okay, I'm not suggesting that the interest rate should be back at 2% or 2 and a half percent That was probably a wrong level anyway But we definitely need to bring them back down so that there can become some affordability When you get that combination of a demand with a little bit more affordability The other thing that has started to happen is that prices have actually dropped. It's not showing the median prices has risen a little bit But but it overall in general the prices have actually started to drop That hasn't hit the numbers yet. It will hit the numbers. I promise you that I remember was on when I was on with Barney And I talked to him about the recession about three years ago And he goes you're calling your housing recession You just use the R word and I said I am and we were But I promise you that that's gonna start happening. Well Lydia another thing that's changed with a pandemic the pandemic We saw the price of government increase by 50% a 50% increase in the amount of money our economy was being used to pay the government a lot of that went to Emergency payments that were supposed to timeout They didn't because we had the Biden administration come in and kept that level of spending that 50% We've never had an explosion of increase like that perhaps during World War two But even then it didn't match match these this this percentage rise Don't we have to tackle that isn't that part? The this the big sucking sound you hear is the government taking a lot of capital out of the private sector It would seem to me that that absolutely needs to be addressed And it sounds like that's also a work in progress because that's a hard band-aid to pull off But I think that's also why the Trump administration talks about growth and finding other ways of generating some revenue, right? But you know I kind of come back to this thought about when I think about what locally real estate and supply and demand I'm living in New Jersey, which is an incredibly competitive real estate area with high prices and the high interest rates when I think about the interest rates now Coming down David. I think great. That is some relief. That's been that we've all wanted for so long But my worry Mauricio is that the interest rates coming down? That gives the current homeowners who may be bought over the past couple of years an opportunity to refinance so good for them Right, they bought the home and they dated the rate so to speak. But what does that mean for prices? I know that you have some optimism that prices are gonna level off or come down But my concern especially in the state of New Jersey and some other competitive districts is that it's just gonna force prices up even higher People that have been waiting on the sidelines and are gonna get out there and we're gonna see a voracious market yet again We need to unlock supply There's two ways to unlocking supply Lowering interest rates and letting some people that want to sell sell because they're holding on to that and the other one is to build new homes, right We need to create both incentives in order to create supply and if you can balance supply and demand you're gonna see affordability Through interest rates and through price drops Adam New Jersey was just mentioned as a place where housing is exploded Yeah, the year that I was born right a long time ago My dad had a house in New Jersey in Dumas, New Jersey Bergen County. He'd commute to Manhattan every day He had two kids and a wife who didn't work He had my grandfather who lived in the basement All was being paid for with a salary of you know, how much how much thirty five hundred dollars a year now Of course, there's been inflation that earns five hundred thirty five hundred that translates into forty two thousand dollars in what universe? Could you buy a house have a car have two kids a wife who doesn't work and a grandfather stay with you at? $42,000 certainly not in any suburb of Manhattan No, well, I mean health care for a family of four alone would probably start to approach that number I mean it is absolutely crazy. And so, you know, I mentioned I'm recently married and So a woman from Dallas and we go down to Dallas and just love it We thought you know, I wonder if we were to move to Dallas. Could we save money? Nope, can't save money and then we were down in Miami and we looked at Coral Gables probably an area you knew Nope nope can't save money there. What about Mountain Brook, Alabama? I've got friends there and it's beautiful. Well, it's expensive, too I mean there are just no bargains I don't know how this has happened, but it's insane if you want to buy a nice home. I don't care where it is It's expensive Well, it involves the restructuring of the American economy Which is something that President Trump says he's gonna get involved in doing I mean bringing a lot of them the the work the factories Backed home to America and that might just might change the whole Economic perspective of things folks stay with Fox Business Jackie D'Angelo's it's gonna be hosting Maria Bartiromo's Wall Street tonight That's at 7 p.m. It's a Friday night Put your TV dinner by the TV itself and watch it. We got a big lineup. You don't want to miss it