'FROZEN': Mortgage rates dip but housing market remains stuck #foxbusiness #bigmoneyshow

Mortgage rates have been steadily falling and are now at their lowest level in more than a year, but America's housing market still feels a little frozen. Existing home sales are on track for their third straight year near multi-decade lows because even though rates are down to just about 6%, most homeowners still don't want to sell. More than half are locked into a way better mortgage rate below 4%. And Mike, I'm looking at this and saying to myself, part of that Goldilocks scenario that I was talking about with the Fed lowers rates is maybe another point on mortgage rates. Freddie Mac is at 6.21% for the 30-year fixed. If you could get that down to 5.21% in six months or approximately that time range, I think it would free up a lot of people to consider the housing market where they once weren't before. And my point is that the delta of like 1% right now is really close to kind of opening things. Absolutely. I agree. And so we're getting there. I think we're moving in the right direction. But also I think the messaging out to the younger people now is less. You can just rent. You don't need to own a home anymore. And owning a home is back to being part of the American dream. So I think there will be demand coming into the market. And my first mortgage was 10.65%. So a lot higher than where we are now. So it can be affordable. Not everyone can afford every home, but you find a home that works for you and a market that works for you. I think you will see people looking to put down roots, buy a home, stay there for however long they're going to stay. But I think that's coming soon in 2026. Right. And not everybody had two and a half or 3% mortgages. 4% is probably a little bit of a better average. So if you get into that range, Brian, all of a sudden, say you're a boomer, a lot of equity is tied up in your house and there's value gain there as well. You haven't really wanted to sell because you say to yourself, where am I going to go? Prices haven't come down. And where am I going to move for this, even if I'm downsizing? If they reduce that capital gains tax, that is something that could make it more attractive. I spent the last 30 seconds preparing a whole riff on why I don't think lower interest rates are going to solve this problem. But then you just threw the capital gains thing in. OK, so I don't know. Earlier, I argued that I don't want any gimmicks. OK, just let things go. So you tell me if this is a gimmick, but I'm thinking about this lowering capital gains. I don't temporarily. Maybe it's a two year, three year deal. Maybe it's even a sliding scale on capital gains, but just something where people will take a lower price for their house because after tax, they end up at the same spot they want it. Right. I like lower taxes. I like permanent lower taxes, not temporary. So argue with me on that if you want to. But that to me seems like the exception where it's not a gimmick. It's telling people you can keep more of your money and you can afford to bring an exorbitant home price down for the people who want to get into a house. And and I feel like that is more sustainable than hoping for lower interest rates. Will people do it, though, or will people do the calculation and say, OK, I'm getting this kind of a discount on the capital gains now? That's more money in my pocket. I'm still going to keep my price where it is. I think they will. I mean, I think we see that playing out. New Jersey's got crazy high taxes across the board, but there's also the mansion tax. I've talked about it before where it's a tax that's imposed on buyers and sellers for the sale of a mansion. But a mansion, they count as a million dollar home, which unfortunately, New Jersey is like an entry level home right now because they haven't adjusted the price. What people do is they just kind of take that in that tax into like the kind of total transaction price and recalculate to figure out what do they really want to buy or sell this home. But I want to cut taxes, raise taxes. You don't think that would help? I think cutting taxes is always a great thing. I'm not sure that that would really help long term because I'm not optimistic that Democrats would ever let us actually permanently. You got to do it through a reconciliation. But I hear you. Taxes and bring the rates down. Now we're talking. Yeah. So we've had two people last week say five and a half could be the magic number, right? It's not a three. It's not a four. But it's that sticky point where it's enough for me to think about getting out of my existing home. Five and a half is something that I can deal with in a new home. It's not six. It's not seven. I'll take five and a half percent. We two people say that one of them was Larry Kudlow. So I'll take that. So I like five and a half percent. Jackie, I am encouraged by the data when we talk about existing home sales in November that had been up that were up 13 percent in the week ending December 12th year over year. That shows that with the decline in mortgage rates over time, people are starting to lay down and put that purchase price down. So I like it. And then eventually I don't I feel like we've been talking about, oh, but the three percent mortgage for so long, eventually, as you guys know, circumstances change. My family's circumstance changed. I had to get out of that three percent mortgage because life changed. And at some point you just have to move on. Did that mean lowering the price of my home? Absolutely. Does it mean that I sold it for less than I purchased it for? Yes. But at some point you have to do what's right. Jackie, you've talked to me about that all the time. You have to do what's right for your family. So I feel like hopefully that five and a half percent number is enough to get some of this stuff moving. And then the supply side is a whole other story. If you ever need a deregulation, you could just boost housing. You bring up the prices and that's definitely an issue because we're seeing record prices. When you had a 10 percent mortgage, my guess is that prices fell to adjust for that mortgage to a certain degree. They just haven't done that this time. And that's a supply issue. How do we get the prices down? Is it more people just saying, OK, the math makes more sense for me now, so I'm willing to do this because I need to do it and I'm not going to torture myself anymore? I don't know if that's enough. I just I don't know what cracks the price equation. You know what it is? I mean, I think the market over time would adjust. You know, that's not the problem. Life events are maybe they're going to happen more slowly. I don't know. The market will adjust. The problem here is it's the political timing of it. Economically, things will come back. But the problem is you have a midterm in twenty twenty six. And so nobody's saying is the market going to come back or price is going to fall and they will. The question always is, will they fall before twenty twenty six? And that's what I hate about this, because you end up going back to what I said before. You end up having a housing policy created with a midterm in mind instead of with the housing market in mind. And that's where I I think we run this risk of of doing things like portable mortgages or 50 year mortgages that are going to create more noise and they're going to create help and might actually slow that record. So I'm with you on that. I mean, so I don't know. That's what I'm saying is we got to not aim for midterms. I know it's hard because everyone thinks it's like it's the be all end all election, but you can't aim at midterms when you're trying to fix how the only other positive is. And Stephen Moore wrote this. The ratio is one twenty nine to one for every one new regulation. There are now one hundred and twenty nine cuts in regulations. That's not all within housing, but the math gets there that we're cutting more than we're adding in terms of the burden on builders, for example. Totally. And I think as time goes by, people now are sitting there looking at a house and saying, man, I could have got a two percent mortgage, two and a half percent a few years ago, three percent. And as time goes by, things will normalize and people won't be comparing what they can buy to a two or three percent mortgage. So it's to your point, Brian, it's going to fix it. Will it correct? But will it correct before November? It's a tough part. It might it might not. Either way, if it corrects overall, it's still a win. And I hear you on this election being kind of like a deadline that everybody's looking at. But life goes on past elections as well.