Latest / The Can-Do Lender Podcast Series: Products & Coffee / Products & Coffee with Josh Ep 1: Housing Affordability Crisis in America

Transcript

Products & Coffee with Josh Ep 1: Housing Affordability Crisis in America · The Can-Do Lender Podcast Series: Products & Coffee

• 0:00
  SPEAKER_00: We have a housing affordability crisis in America, but the culture's not what you think.
• 0:03
  SPEAKER_00: I'll give you two hints.
• 0:04
  SPEAKER_00: It's not just high interest rates and it's not high sales prices.
• 0:07
  SPEAKER_00: So what is it?
• 0:08
  SPEAKER_00: Hi, I'm Josh Doherty, the can-do lender, mortgage broker, owner, and MLO with MFP Home Loans, and a US Morein vendor.
• 0:15
  SPEAKER_00: Welcome to my very first episode of Products and Coffee with Josh.
• 0:18
  SPEAKER_00: I've got my old school original First Horizon All Things Financial mug from my pre-2008 crisis era, one of the first companies I worked for early in my career.
• 0:27
  SPEAKER_00: It's kind of ironic to start with this one considering what we're facing now.
• 0:31
  SPEAKER_00: It's not a financial crisis this time, it's an affordability crisis.
• 0:34
  SPEAKER_00: A few future episodes we'll see what other mugs I can dig up.
• 0:37
  SPEAKER_00: Now for today's question.
• 0:39
  SPEAKER_00: One of the questions I hear the most, when is housing going to feel affordable again?
• 0:43
  SPEAKER_00: I've heard from two people recently who framed this perfectly.
• 0:46
  SPEAKER_00: The first is Bob Chofin, a warden lecturer, nationally recognized published author, CPA, and attorney who teaches real estate, entrepreneurship, and hosts the podcast Business Talk with Chofin.
• 0:57
  SPEAKER_00: Bob gave a clean take on the overall national picture.
• 1:00
  SPEAKER_00: The second is my friend and business associate, Christopher Franklin, a licensed associate real estate broker at Brown Harrison Stevens, partnered with Brian J.
• 1:07
  SPEAKER_00: Manning.
• 1:08
  SPEAKER_00: Real trends has ranked them in the top 1.5% of agents nationwide.
• 1:12
  SPEAKER_00: Chris clearly painted the high-end and the lower end market extremes coexisting in New York City right now.
• 1:18
  SPEAKER_00: First with Bob.
• 1:19
  SPEAKER_00: Bob's point is simple.
• 1:20
  SPEAKER_00: Regardless of where you are in the U.S., affordability has only three levers home prices, mortgage rates, and income growth.
• 1:27
  SPEAKER_00: He described prices as sticky.
• 1:29
  SPEAKER_00: Mortgage rates came off their peak, but they're still high enough that the monthly payment pain is real.
• 1:33
  SPEAKER_00: And who knows when either of those is going to change, at least for the foreseeable future.
• 1:38
  SPEAKER_00: What that leaves is the third pillar.
• 1:40
  SPEAKER_00: Income is the piece that can actually move the needle.
• 1:44
  SPEAKER_00: That's the answer to the original question.
• 1:46
  SPEAKER_00: If you've followed employment and inflation news across the country, you already know incomes have failed to keep up with the cost of living for a long time.
• 1:53
  SPEAKER_00: Prices rise over time.
• 1:55
  SPEAKER_00: So the expectation that today's monthly housing expense is going to line up with payments from 10 years ago or even five years ago is not reasonable.
• 2:04
  SPEAKER_00: What is reasonable is that companies would adjust with inflation and take care of their most valuable asset, their people.
• 2:11
  SPEAKER_00: Award the raises that keep pace with the cost of living.
• 2:14
  SPEAKER_00: In too many places, that has not happened.
• 2:17
  SPEAKER_00: Folks who are already strapped have been watching housing costs jump with little or no change in the paycheck.
• 2:22
  SPEAKER_00: That could only go for so long.
• 2:24
  SPEAKER_00: I don't think the answer is sitting around hoping rates or prices collapse.
• 2:28
  SPEAKER_00: I think the pressure shows up in the household budget first.
• 2:32
  SPEAKER_00: Just think about it.
• 2:33
  SPEAKER_00: If more employers adjusted wages to meet today's prices and today's rates, housing would feel different overnight.
• 2:39
  SPEAKER_00: Even the payment is twice what it was five years ago.
• 2:42
  SPEAKER_00: What makes a home more affordable?
• 2:44
  SPEAKER_00: More income does.
• 2:45
  SPEAKER_00: That's not a trick question.
• 2:46
  SPEAKER_00: Or being independently wealthy, of course.
• 2:48
  SPEAKER_00: Another example of that wage versus independent wealth gap, what I call the haves and the have nots, could not be better illustrated than in Chris's recent video.
• 2:57
  SPEAKER_00: A tale of two markets.
• 2:58
  SPEAKER_00: At the very top, New York listings at$10 million up are running ahead of last year.
• 3:03
  SPEAKER_00: About 218 of those properties have gone under contract this year, roughly 8% ahead of the same stretch in 2025.
• 3:10
  SPEAKER_00: On the other end of the spectrum, in the$1 to$3 million range, the finance buyer in New York, higher rates are freezing people out and keeping them in rentals.
• 3:19
  SPEAKER_00: Chris also pointed to a tight rental market on that end.
• 3:21
  SPEAKER_00: Manhattan's median rent hit a record around$5,000, and rental inventory fell hard year over year.
• 3:28
  SPEAKER_00: So that younger professional or move up buyer isn't just locked out of buying, they're getting squeezed on rent too.
• 3:34
  SPEAKER_00: That's the widening gap.
• 3:36
  SPEAKER_00: And who would ever thought one to three million dollar buyer would start feeling like the have nots?
• 3:40
  SPEAKER_00: Not me.
• 3:41
  SPEAKER_00: So what's the bottom line?
• 3:43
  SPEAKER_00: If you're waiting for rates and prices to come down or for some magic fix, don't keep holding your breath.
• 3:49
  SPEAKER_00: Your best play right now is to take a hard look at your income potential, reevaluate your job opportunities.
• 3:55
  SPEAKER_00: If you've earned a raise, ask for it.
• 3:58
  SPEAKER_00: Get honest about what you can carry every month and still have a life.
• 4:01
  SPEAKER_00: In a textbook world, a lot of people aim to keep housing around a third of their gross monthly income.
• 4:07
  SPEAKER_00: We don't always live in the textbook world.
• 4:09
  SPEAKER_00: That's why you contact a mortgage professional first.
• 4:13
  SPEAKER_00: Run the real numbers, decide what you can afford in real life, and confirm what you can actually get pre-approved for.
• 4:19
  SPEAKER_00: Real estate is still how a lot of families build long-term wealth.
• 4:23
  SPEAKER_00: Markets fluctuate.
• 4:24
  SPEAKER_00: You don't have to guess the exact bottom.
• 4:26
  SPEAKER_00: You just have to know the number you can actually live with and qualify for today.
• 4:30
  SPEAKER_00: So figure out what you can comfortably afford now and still have a life.
• 4:34
  SPEAKER_00: Then pray on it, meditate on it, and most important, don't wait for your miracle.
• 4:38
  SPEAKER_00: Create it.
• 4:39
  SPEAKER_00: If you're thinking about buying or refinancing in Florida, or you just want to run those numbers, or you have general real estate questions, send me a DM or visit mmphomeloans.com.
• 4:48
  SPEAKER_00: Knowing is half the battle.
• 4:50
  SPEAKER_00: Until next time, take care.