Power Up Wealth podcast – Episode 81 – Is the Housing Market on the Nice or the Naughty List?
Sharla Jessop 0:00
There’s been a lot of uncertainty in the housing market this year. I’m Sharla Jessop, and today, my guest and colleague, Brandi Romero, is going to share with us whether the housing market will be on the nice list or the naughty list.
Welcome to the SFS Power Up Wealth podcast, where we provide impactful insight and expert opinions on timeless financial principles and timely investment topics, preparing you to make smarter decisions with your money.
Brandi, thanks for joining me today.
Brandi Romero 0:48
Thanks so much Sharla for having me. I’m excited to be on this podcast.
Sharla Jessop 0:51
Well good. Brandi is part of the wealth management team at Smedley Financial Services. She’s a client service representative, and she also is a licensed loan officer.
Brandi Romero 1:00
That’s right. I’ve been licensed in mortgage for the last three years and in the banking industry for the last 20 years.
Sharla Jessop 1:09
Well good, you’ll have a lot of insight. You know, the markets have changed. Housing has been quite up and down and uncertain this year. How do we contrast that with previous housing markets?
Brandi Romero 1:20
Yeah I think that might be a little bit of an understatement, but you know, there’s so many things that go into mortgage these days. There’s a lot of different rulings and regulations that have gone into place since 2008 when we really had our big crash. Everyone is still scared, and rightfully so, but we’ve really gone into way to put in a lot of different regulations to make it so that something like that doesn’t happen again.
Sharla Jessop 1:45
Well, that’s good because that those of us who lived through that period of time and were dealing with the market and trying to buy houses or owning homes and selling them, it was really uncertain, and it really had a rollover effect into the investment markets as well. Talk to us a little bit about the some of the stronger fundamentals in the market right now?
Brandi Romero 2:03
Yeah! Absolutely. So I think it all goes into play too. We’ve got a whole new group of a housing market coming in, the millennials, right? So we’ve got these kids who are of age, they’re starting to buy homes. So we’re seeing a lot more interest of a younger clientele really wanting to purchase a house. And, you know, have that American dream where we’ve got another generation, our baby boomers who are looking to downsize now. So really, there’s a lot of a huge influx, really, of interest in wanting to buy a home where that hasn’t been in the past. Now we look at inflation kind of contradicts and contrasts with the amount of people who want to buy a home. It’s really, really hard to buy a home right now because of inflation and how high rates have gotten, but I think we are going to see a few rate cuts by the end of the year. The Federal Reserve is going to do those rate cuts so that they can make housing a little bit more affordable for those millennials coming to try to buy a new home, and even for our baby boomers who are selling, they need to have great rates too to be able to afford their new properties as well.
Right! I think the rates, low rates, have kept people in place.
Absolutely!
Sharla Jessop 2:46
People who would have moved in the past are holding steady.
Brandi Romero 3:19
Yeah no one wants to give up their low interest rates in the threes and the fours for a high rate of six, you know. So it’s, it’s a little bit a push and shove, you know, kind of thing right now where you really want to do something, but it’s, you know, what are you giving up? And really, it’s, it’s all about the individual and the lifestyle that they want to live.
Sharla Jessop 3:37
That makes perfect sense. Same as when we do financial planning.
Brandi Romero 3:39
Yep.
Sharla Jessop 3:39
Housing fits right into that. So talk a little bit about how the lending has changed and some of the qualifications and requirements.
Brandi Romero 3:48
I think lenders have really gone into their workflow to see where there’s been issues. So are we looking at credit? You know, back back in 2008 the lending guidelines were just not strict, and they have definitely become more strict. So we’re looking at high credit scores. We’re looking at multiple verifications throughout the lending process, from start to finish. You know, seven days before you go to clothing, they’re calling your employer to make sure that you still have a job. Time and time again, I’ve gone to a closing and somebody’s saying, oh, well, now, you know, I quit my job. Why do I need a job? You wouldn’t believe it, but it does happen. So there are so many more strict things put in place by the lenders with credit, income, assets, things like that, that are in place to prevent housing crashes, like 2008.
Sharla Jessop 4:35
A much stronger verification process, where before.
Brandi Romero 4:37
So much stronger.
Sharla Jessop 4:38
We used to laugh about it, but anyone with the pulse could get a mortgage loan.
Brandi Romero 4:42
Yeah. Stated income loans. I was not in lending then, thank goodness. But you know, that just sounds scary to me. You know, somebody could come in and say, yeah, I make $100,000 a year, can I get this loan? Sure, go ahead and sign here. That’s where we really got into a lot of issues. And you know, along with appraisers inflating the values for people to make things work. That just really isn’t something that happens today. There’s just so many guidelines in place, and we have so many resources online that tell us, you know, values of homes, even your income and your assets, we can verify online now too.
Sharla Jessop 5:15
That’s amazing. Technology makes it smoother.
Brandi Romero 5:18
It really does help a lot.
Sharla Jessop 5:20
So talk about stability and income growth in housing prices.
Brandi Romero 5:21
We are seeing an influx, you know, throughout the nation, of housing prices increasing. We are seeing some income increase. We are, you know, nationwide, we’re not able to afford housing right now, really, all over the nation, and I think that our government is really working on making things more affordable. Like I mentioned before, we are looking at doing some rate cuts throughout the year. We’ve already had quite a few this year, and we’re hoping to see at least two more happen. So we’re hoping that will help boost the applications that are coming in. And we have had those influxes throughout the year. I think everyone’s seen, you know, those dips in rates, and everyone gets really excited, and it does help a lot of people when that happens. But I think throughout the year, we’ll see that happen a little bit more, and hopefully we’ll see some more income increases as well going forward.
Sharla Jessop 6:13
I think the younger generation trying to get into homes first time home buyers, is really, really tough.
Brandi Romero 6:19
Yeah
Sharla Jessop 6:19
Not all over. But you know, we’re recording here in Utah, and the housing market’s been very high.
Brandi Romero 6:24
It’s very high here. There’s some other states that are right up there with us, but really nationwide, it’s very high. It’s almost unattainable for most people. And we’re seeing a lot of multi family houses come together just to make that American dream happen of owning that home and being able to pass it down to their legacy.
Sharla Jessop 6:40
Parents and children living together.
Brandi Romero 6:42
Yeah, they’re going in on loans together and making it happen, because that’s the dream that they want to live. And you know, it’s great that they can get their foot in the door. It’s just that one step closer to having that wealth that they’ve always wanted to have.
Sharla Jessop 6:55
And I’m sure there are regions where the housing market isn’t so absurdly high.
Brandi Romero 7:00
That’s correct. Yeah, some, some of the states in the Midwest are a little bit more affordable and reasonable, but it’s all about preference, right? We’re not all going to move to the Midwest just to go, you know, buy a house. So, I mean, there are so many different avenues as well. There’s a lot of, especially in Utah, a lot of government assistance where you can get help to pay for your closing costs or your down payment as well.
Sharla Jessop 7:21
I love that, because young people now more than ever need a step up to help them get started in an expensive housing market. Tell us some of the other things that people can look forward to over the next year in the housing market. I know that right now, we have a very tight market because we don’t have enough housing.
Brandi Romero 7:42
Yeah the inventory is very low right now. And I think as we’ve come out of COVID, we’ve seen an influx. Everyone kind of got that itch again to go get their new house and start reliving their lives again. But really, the inventory seems like it’s there and then it’s gone the next day. So while we have seen an influx in applications, the inventory is still a very big concern, and I think a lot of especially in Utah too, we’ve got some more initiatives here for builders to build more affordable homes for our youth to be going into. So I I’m hoping that we see a lot more initiative that of that going forward next year to really entice millennials and even our baby boomers who are maybe downsizing. I think those will be kind of in that more affordable home range for those generations.
Sharla Jessop 8:32
And that alone, that one item alone, the fact that we have a shortage of homes, makes this market that we’re in right now so significantly different than what we experienced back in 2007 and 2008.
Brandi Romero 8:47
Absolutely. Yeah, but back then we had an influx of properties. You know, we had geared up for everyone to start buying, buying, buying, buying, buying, and then we just had way too much inventory at that point. So that is a big difference of right now too. Yes, we do have some inventory, more than we’ve had before, but not even nearly as close to what we had in 2008.
Sharla Jessop 9:05
And not so much speculation, not so many people buying or building homes on speculation.
Brandi Romero 9:10
Exactly.
Sharla Jessop 9:11
That they’re going to have a buyer come in. Brandi this information is so valuable to our listeners. Thank you so much for joining me.
Brandi Romero 9:17
Absolutely. Thank you so much for having me.
Shane Thomas 9:24
Thank you for joining the Power Up Wealth podcast. Smedley Financial is located at 102 S 200 E Ste 100 in Salt Lake City, UT 84111. Call us today at 800-748-4788. You can also find us on the web at Smedleyfinancial.com, Facebook, Instagram, Twitter, and LinkedIn. The views expressed are Smedley Financials and should not be construed directly or indirectly as an offer to buy or sell any securities or services mentioned herein. Investing is subject to risks, including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should only be relied upon when coordinated with individual professional advice. Securities offered through Osaic Wealth, Inc., member FINRA/SIPC. Investment advisory services offered through Smedley Financial Services, Inc.® Osaic Wealth is separately owned, and other entities and/or marketing names, products, or services referenced here are independent of Osaic Wealth.
