- The Borrow Smart Chronicles
- Posts
- The Borrow Smart Chronicles - Income, Down Payment and Rates
The Borrow Smart Chronicles - Income, Down Payment and Rates
Episode 13
Todd Ballenger
February 02, 2024
"If alcohol fuels Dionysian tendencies,
caffeine nurtures the Apollonian."
Weekly Spotlight: Housing Affordability
Short and sweet today: inventory is trending down, but house prices are still trending up. Affordability: since COVID has gone down so much, we are at all-time lows. We’ve talked about it before, but the money supply doubled, and awash in cash, the markets have driven the prices of almost everything ‘to the moon’.
To get housing prices back to pre-COVID levels, one (or a combination of these things) needs to happen.
1) the average person makes 69% more income
2) the average house price becomes 41% cheaper
3) the average mortgage rate drops by 4%
Ideally, it would be a combination of these: income goes up 10%, housing prices come down 10%, and rates come down 2%… That would be a softer landing.
The real issue is that income isn’t going up 69%, so if house prices come down, and/or rates come down, it might be we are in a major recession. One other wild card - inventory goes up, but that would drive 2) aka - house prices lower.a BORROW SMART CONCEPT
The Mortgage Business
It is great to see our students and others I speak with in the industry start to get busier. It’s not crazy busy, but business is picking up, and if you are going to grow your business this year, you want to be growing personally. One skill you should learn is to ‘make markets’.
You’ll see a lot of charts below on paying points. TIP: You can lower the rate by making extra payments. Help consumers understand that the note rate is fixed, but the actual rate they pay is a function of how fast they repay their notes.
Hat Tip - Len Kiefer
LIABILITIES
What’s Happening?
from the recent FED statements - see: NYCB
applications are still down but finding a bottom
rate cut pushed back
still expected lower - much lower by some…
we are here…
I have felt like this guy many times as a lender - ‘Frankly, I like the business.”
REAL ESTATE
What’s Happening?
slight decrease over the last two weeks
inventory going up
house prices still rising
median house prices are up
median list prices are up
realtors are making less money
most inventory growth in the middle of the US
we still need more inventory
rent costs are going down as well
overall home ownership rates back to the 70’s average
“One martini is all right. Two are too many, and three are not enough.”
ASSETS
What’s Happening?
there is a lot of risk for a commercial loan / bank crisis
we still don’t like to save
but when you do save, it tends to compound
there are a few months that tend to be down (February and September)
the longer you have the more compounding possible
if we were like the government we would borrow more
When starting the day: It's going to be a good day.
When meeting someone new: I'm going to like them.
When trying something challenging: It's going to work out.
ON BEING HUMAN
What’s Worth Sharing?
Wild Geese
“You do not have to be good.
You do not have to walk on your knees for a hundred miles through the desert repenting.
You only have to let the soft animal
of your body love what it loves.
Tell me about despair, yours,
and I will tell you mine.
Meanwhile the world goes on.
Meanwhile the sun and the clear pebbles of the rain are moving across the landscapes,
over the prairies and the deep trees,the mountains and the rivers.
Meanwhile the wild geese,
high in the clean blue air,
are heading home again.
Whoever you are,
no matter how lonely,
the world offers itself to your imagination,
calls to you like the wild geese,
harsh and exciting - over and over announcing your place in the family of things.”
Mary Oliver
DOPAMEMES
And Other Inspirations…
Just chilling: I love bees, this one is super chill.
Awesome Article on Brainstorming to get out of your comfort zone:
<
AIdeas
Future Hacks…
A favorite AI tool for quick logos and graphics:
https://bard.google.com/chat
Continuing to warm on Bard, I do most work in Chat GPT, but then copy the final into Bard for a ‘second opinion’. Now Google Bard has image creation.
Prompt: ‘Young couple closing on their first home - pencil sketch’
Was this email forwarded to you? Sign up here.