home buyers face record high home prices and mortgage rates at the same time that's pretty crazy record high home prices and record high mortgage rates there are not enough homes in this country and that's pushing home ownership Out Of Reach for too many families with an estimated shortage of 4 and half million homes in the US mortgage rates biggest increase in 2 months going back over 7% breaking a 3-we downward streak the 30-year mortgage rate is at 7. 03 from 6. 93 the rate for Jumbo loans increased to 7.
11 from 7. 04 increase cause the market Composite Index a measure of mortgage application volume to Fall by 2. 6% to 2065 for the week ending June 28 purchase index fell 3.
3% and refinance index fell another 1 a half% right now what it says what we've been saying for a while if you can find a great rental in the market that you are in and maybe live below your means underc consumed housing that's the play and that's what I recommend to people right now if home prices are at an all-time high and you get a bonus or you got something you think you can go buy a house right now just remember at the alltime high your property tax is at the all-time high for that house and also your homeowners insurance is going to be high because you have to ensure the value of replacing the home which is very high so right now if you could find a diamond in the rough in a market you're in and then maybe wait a year and a half and refinance great do it but for most people the best play is going to be be conservative be a little bit below your means save hey maybe rent and save with all the money you would have had to put out for the payment at that rate because fed rates are probably going to come down just a little bit under seven save that money and rent right now that's what it is for mortgages and unless you find a diamond in your Market rent for now be conservative save you will thank yourself once all the stuff starts moving when the FED rates move toward the end this conflicted with that you know why I'm conflicted with that Tom because I think the moment rates drop okay so chances of trump become president are you at 70% yes I'm at 75% to be EXA all let's just say he's going to be president what's the chances that with the policies that he continues the way the Market's going to react are the Trump tax cuts going to continue oh yeah they're going to be renewed they're not going to expire they're going to be renewed okay what's he going to do with driving the FED interest rates you think he's going to be able to bring optimism there yes I think we'll be at 675 end of this year and then next year I think we'll be in mid five so I think he'll get it to 5 and a half by end of next year so how does it work rates go up prices go go down right rates go down prices go up right today rates are going up and what's happening with the prices prices are going up right on shortage of numbers to sell for sure but what happens if all of a sudden rates drop next year what happens to prices prices in theory should go up because more people are demanding but right now the American Consumer has got more debt than they've had in the last 32 years totally get it but if that drops if the rates drop people are going to be buying home homes not a lot of inventory of homes you don't have a lot of options and that will push the prices up a little further in better market so to me I'm very careful with this guys here's what I've learned for the last four years specifically Co era during the co era what do we learn and not only the co era the last 128 economic expansion plus the four years of covid a lot of things are unpredictable so whatever you choose to do here with the house whether you buy or you don't buy just be ready for the risk both ways there's a whole faction of people that are saying the stock market's going to crash and there's a community that believes that is also coming that you can't take that off the table where just too many weird numbers are moving in a direction that something can all of a sudden happen so it is a risk you got to take but the way I look at it is if you're an average day-to-day person that's got a wife and kids and you need a house if you want to make the house your family house you can create some memories in it and you're planning on living in this place for more than 5 seven years you have less to worry about because even if the rates drop in 2 years what can you do refinance okay you can always do that but if I you at a point you're like listen I'm sick and tired of renting I'd like to get a place I keep delaying this what do you think I should do make the decision if it's a 5 to seven-year move if it's a oneyear 2year move oh absolutely not I wouldn't be touching it State Farm issued an ultimatum to California demanding to raise home insurance rates by 30% for homeowners 36% for condo owners 52% for renters or it will exit the state let me say one more time State Farm is giving an ultimatum to Gavin Nome demanding to raise home insurance rates by 30% condo 36% 52% for renters or else they're leaving you know how embarrassing that would be if they also leave the state of California this has the potential to affect millions of California consumers and the Integrity of our residential property insurance market so they know they better do something the move by State Farm follows a series of insurers including cluding All State rate Changers are driven by increased costs and risks Tom so I dove into this a little bit do you know what on the last 5 years is the increased rebuild cost 5 years going back 2019 right before Co to right now what is the total inflation rate on the labor the subcontractors and all you know copper Lumber drywall all the things you would have to do if you're State Farm because you're going to pay people to rebuild your house half burned down all burned down rebuild 31% increase in the rebuild cost so the insurers are looking at it saying wow if your house burned down right now in California it's costing me 31% more today than it did 5 years ago to rebuild that and part of your insurance is going into a pool only some of the people have a House burn down and out of that pool has to come the recovery or the rebuild cost so there's also the rebuild cost and then there's also they're calling it climate change risk but this was the state mismanaging its relationship with PG&E cuz pg& and these ancient transmission lines arked and caused the Northern California wildfires of the last three years it's a fact that's what caused these it was mismanagement they didn't get out and cut the Timber and make what's called fire lines where you can see you fly in an airplane and you'll see the high tension wires or the power lines with like little valleys cut in the trees they didn't do that they didn't take care of their own forest this is bad management by the state of California they can blame it on climate disaster but the reality is there were more wildfires and pg& was responsible for them and they were leted off the hook by the state of California and all of it comes to State Farm saying look there's more risk of wildfires and it's costing me a fortune for these things to be burned down I can't afford to do business with You Gavin when you look at the math the cost of living in California has skyrocketed what you're getting the bang for your buck of what you're getting in California has plummeted and the numbers just don't support this whatsoever ultimately it's going to come down to supply and demand and I'll make a little analogy here I live an hour away in Miami we all know this sometimes I'm like oh traffic is crazy I got here in 25 minutes today why because it's July 4th nobody's on the roads it was incredible the price was half the price of what it typically costs to Uber here in the morning the market right now is basically saying dude you can't live in California it's too expensive Insurance costs too much the housing costs too much the property tax is too much math is not on Gavin Newsome side or Nei the ODS so climate change driven Insurance crisis threatens new States California's won Florida's won Louisiana's won this is not something that only California is dealing with Geico fullon left California GAO shut down all of their offices and shut down California Tokyo and trans now join State Farm and all state in discontinuing coverage for California residents do you realize State Farm and all state how big these guys are can you imagine you're now buying a house you're like I don't even know who to get my insurance from right now these are high quality companies these are high quality companies leaving now Florida Insurance crisis worsens as farmer pulls out some insurance companies have left Florida United Property Casualty Insurance company and five other Property and Casualty companies since 2017 other companies such as Nationwide Progressive Southern Fidelity and Universal have also left or non-renewed policies in the state nationwide's big Progressive is big but if you think about it all state hasn't left yet State Farm hasn't pulled out yet and these Governors have to be very careful to realize you can make life health for insurance companies but insurance companies are for-profit companies you're not paying them with taxpayer money they have to find a way for it to make sense for them to do business in your state it's going to be interesting to see both California and Florida how they manage this this could be very nasty I am so curious to know how California responds to the demands given to them by 30% more yeah I'm so curious in how they respond that's a lot of money though isn't it 30% more for your tax for your house insurance it's not because they're going to profit 30% more the prices are going up it's just going up they're like what do you want going to do about it I'm having it's it's expensive right what increases it crime weather theft these are basic things I'm not going to ensure cars in your community cuz everybody's stealing cars from your community period like what do insurance companies ask when you get auto insurance how far do you live from your place right how much do you drive do you have a garage do you have a garage do you live in a gator Community right how many miles are you going to put in this car why do they ask these questions your liability that's right they're going to ask us so what do you think if now go to a state what's the crime of a state what's the hamasa what the this what's the accidents what's the car theft a basic question in a boardroom would be why are we doing a business in a state that crime is increasing the way it has the last four years why are we doing business in a state that homelessness is at the highest level these are very good quot the Governor's job is to lower that eliminate that make it safer so Insurance say great or hey California every couple years the other day we're driving on 405 freeway you know what's the first thing Jennifer and I said were you with us no you were in the other car cuz those two cars were driving Jennifer's like babe I don't think I've seen this you know how you go four or five freeway you're going through the Getty museum you know parking to the left I can't remember the last time I saw being this green because normally it's black or brown because of the fires right and I said well babe all this means is fire season's here enjoy this cuz it's probably not going to look like this for too long they have to figure out a solution for these wild fires that happen cuz insurance companies are not going to ensure you look at these houses they're right next to the green on the mountain you're like why would I insure that house why would I insure that house if I'm insurance insurance company so they're asking logical questions not a greedy questions that they're asking we'll see what's going to happen there wage growth slow to 2. 4% annually and unemployment ticked up to 3. 9% with label Force participation remaining at 62.
7 analysts perceived this cooling as favorable providing relief for the Federal Reserve amids inflation concerns the report underscores the necessity of sustainability productivity growth with a rate of 2% offsets a 4% wage potentially mitigating inflationary pressures associated with Rising wages Tom let me translated this for you here's the headline America if you got a good job right now that you think is a pretty good company you get a pretty good boss keep it and be thankful for it and be thankful for good people around you that you've got a good job and I'll tell you why we're reading something from Forbes and the Forbes writers here are always kind of funny I love to read Forbes writer and the jobs report because they seem to think that the footnotes are some sort of a decoration and not something to be read whereas the footnotes pointed out that the amount of full-time jobs are dropping and the jobs report they say we create jobs you need to be asking what kind of jobs part-time jobs have been created at a higher rate and more of them since August of 2023 so we're coming up I mean we can almost see August 2024 here if we get to August that'll be one full year that we've created more part-time jobs every month the full-time jobs which gets kind of scary why is this good for inflation well if for fewer jobs out there for people to get there's fewer competition for the jobs then the wages don't go up because you don't have fewer workers competing for a job and so the one job the one worker wants a job says well I need 25 an hour not 23 an hour and the employer says okay I'll give you 25 an hour instead of 23 and then they raise the price of their product a dollar and that's inflation so what you have right here is if you got a great job keep the job because what's going on in the market right now is the jobs report is showing softness in the economy fewer good full-time jobs more people with second jobs and side hustles are happening and by the way the jobs report the government is admitting that they are not capturing a lot of cash only side hustles and they're not capturing a lot of 1099 side hustles like when your mom takes the SUV and goes driving Uber for the weekend what does this mean with interest rates lowering this year does this mean anything that does it take you from 1 to 2 to three or are you still on the one this makes the Fred happy because it means that jobs and wages aren't pushing inflation and remember the FED said inflation has to get down toward 2% before all think about making a rate cut which consensus is we're going to have one rate cut and the Target that everybody's looking at is September so this makes the FED say hey maybe I will make that one rate cut in September because what the FED doesn't want to see is inflation and if jobs get too hot the other way it creates inflation where the FED will say nope not cutting rates how many people are you getting messages of right now Tom that are talking to you about how do I create a secondary income sight hustle I have two jobs I have three jobs are you getting a lot of people saying that today he was asking about positioning himself for a sales position in a different industry cuz the industry he was in was having layoffs and Cooling and he thought that he had the technical understanding and the ability to learn quick that he could go to another industry and he want to know what I thought about it I gave him an answer referred him to another care expert but I'm getting a lot of job transition questions job fit questions and you know I'm starting up a side hustle what do you think of this questions I'm getting a lot of them just because it's an election year I just want to Circle it back to why it's so important and here's why I think Trump is the favorite to win the election in my opinion the three most pressing issues in America Trump is winning 2 to one what are they it's the economy stupid James Carville resoundingly he's up 20% in the polls of that Trump is a better candidate on the economy jobs creation inflation that's number one number two immigration the border which basically ties into National Security and term at this point Trump is up on that but number three which is the biggest issue for Democrats especially females is Women's Healthcare and that's the only issue that Biden is actually winning on so Trump if the economy and immigration are the two biggest factors is the favor to win the election mortgage rates continue to climb to 7. 7% mortgage rates climbed this week again exasperating home affordability crisis that is stifling the housing market Freddy Max's latest primary mortgage Market survey released Thursday showed that the average rate on Benchmark 30-year fixed mortgage jumped to 7. 17 this week the average rate on a 30-year loan was 6.
43 a year ago so it's gone from 6. 43 a year ago to 7. 17 the average on a 15year rose to 6.
44 from 6. 39 last week and a year ago the 15E was only 5. 71 and aside from this story Florida housing bubble burst prices fall and Supply sore Florida housing market experienced a dramatic shift as Supply surges and prices stagnate with data from redin revealing that 6 out of 10 Metro areas in the state have seen significant increases in homes for sale as much as a 51% jump in Cape Coral 48% in Northport Sarasota sellers in Florida are slashing prices at a higher rate than elsewhere in us with 48% listings in North Sarasota experiencing price Cuts while 44% in Tampa 44% in Cape Coral affordability challenges are exasperated by the insurance crisis impacting 70% of Florida homeowners and causing delays in deals while Texas is also experiencing similar Market shifts with macallen and Dallas seeing notable increases in Supply in Houston of San Antonio witnessing significant price Cuts Tom what we are seeing is that when winds blow in the wrong directions and they gather together it makes a hurricane and we are seeing I believe the hurricane starting to form in the American housing affordability crisis there's a couple things going on here today actually the 7.
17 is now like 7. 45 so we are sitting on 7 1. 5% 30-year mortgages for people with good credit in the 700s and a reasonable house not multi-million dollar houses that's what they're going to be facing right now it's number one number two you've got Supply brings down prices here's the two things to look at Austin was overbuilt they were building houses at a record rate in Austin and Tow houses at a record rate and high-end apartments at a record rate in Austin and the supply built up and then Tesla failed to hire as many people as they thought and laid off people Dell did not expand the way they thought and if you look at Austin Austin didn't get the job influx had a lot of people moving there and all of the sudden it's plummeting it was down 22% over the last 6 months so Austin is suddenly becoming more affordable now you come in Florida why are these people putting their houses for sale well something came out yesterday pbd credit card delinquency rates the top three states for credit card delinquency that are over 12% delinquency and it's spiking California Texas and Florida so it's sort of interesting and the delinquency rates are highest in Northern Florida so these areas that they're talking about is actually Gul coast and Northern Florida they're seeing suddenly houses are coming onto the market but the housing comes on the market you need someone to buy it how do you qualify to buy it if the interest rates are higher the only way you can afford it the price has to come down so if I'm in one of those markets and I'm desperate to get my house sold so I can get some equity in my pocket make some money on that house cuz the housing price is up I have to lower my price to meet the buyers cuz the buyers at 72% interest rate can only qu qualify for houses that are so much of a price so supply and demand is coming together and I believe we've got pinched consumers now trying to sell their houses putting them on the market and to meet the buyer qualification status they have to drop the prices we've seen it in Austin now we're seeing it in areas of Florida and you know what I can't make a prediction about the wider United States South Florida here it's still very stable there's a lot of people down here and a lot of money down here but we are starting to see it most likely the most important person in America for your pocketbook is Jerome pal so he's the chairman of the FED as the FED moves the country moves economically if you want to know what's going on with mortgages why are they at this rate you have to focus on what the FED fund rate is that's currently sitting at 5.
