9% Mortgage Rates!! Is it Time to Give Up on Real Estate

SPEAKER_1 (0:00)

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Michael Zuber (0:29)

As of this morning, investor loans are right around 7.6% best credit, 25% down.

For some of you, it's probably 8%, maybe 20% down, a little less credit, less experience. But we need to talk about this. We have not really had investor loans at 8% for quite a while. So is this just gonna destroy the market, or will it maybe create some unique opportunities? Casey, you've been in the market a long time, it's a nice portfolio, help people across the country. I'm curious, what are people saying? What are you thinking with investor loans at or very close to 8%?

Casey (1:07)

Well, when the news came out recently, my students were freaking out, you know, the new ones. They didn't know what to do. Oh, am I doing the program at the wrong time? Should I have waited to buy? Maybe I should wait till spring. Maybe I should wait till rates go down. You know, the first feeling is, oh my God, maybe I shouldn't buy. It's going to be more expensive. That's the first, you know, that's the first thing that comes to mind is, oh, maybe it's not the right time.

But you also have to think about the opportunities that are going to be around when everybody is thinking that way. Everyone's thinking, oh no, I see the number eight, let's forget about it. We'll come back another time. But you're going to get tons of opportunity now that we're seeing higher rates. We are going to see, we are going to see some sellers decide not to sell, but guess what, the ones that are going to want to sell are going to be the ones that have to sell. And we're going, they're going to be more motivated, especially as we move into the winter time. It's, oh my God, today is the first day of fall. Michael, it's been 100 degrees, record breaking temperatures in Memphis in September, broke multiple records. And today it's 76 degrees, first day of fall.

Michael Zuber (2:17)

What the heck?

Casey (2:19)

Anyways, that being said, we are fall, moving into the fall season, holidays, winter time. This is not the best time to say, hey, guess what, 8% raise. So there's going to be a lot of freak out happening. But this is the time, if you're buying, to take advantage.

Michael Zuber (2:35)

It's funny, you know, you can go back and read my first book, really read my second book, and realize that what I'm uniquely gifted at in hindsight, I did not know this while I was going through it, was doing the opposite of what the average person does.

If you look at what I've done when I bought, when I sold, when I did this, when I did that, it's always opposite of what the masses are doing. It's like I have an allergic reaction to what everybody else is doing, because everybody else is stupid, and fat, and unhappy. I'm like, why would I want to do anything that the average person is doing? So you're absolutely right. When I think about 8% investor loans, my mind really goes to buyers and sellers, and this is how you broke it down. I'll go to sellers first. You are absolutely right. We are in the fall getting into the winter. It is always the slowest season. You could look at any chart going back decades and realize that it's slow during the fall and winter. And this is like the worst time to have 8% mortgage rates.

For the sellers, you're absolutely right. If your market, if your house has been listed for 60 or 90 days, no showings at open houses, no real offers, you have a choice. Some of you are just going to take it off the market. Cancellation, delisting, whatever you want to call it. And you're going to try again in the spring. But as you said and correctly pointed out, if you keep your property listed through the fall and into the holidays, you're motivated. You want out, and that is a signal. Now to the buyers. I think you're absolutely right to talk about the buyers too. I always call mom and dad the buyers, just the average consumer.

They've been sitting on the sidelines. Maybe they've even been window shopping, and they were window shopping because they wanted rates to go in the fives. They wanted 599, and they thought they would get there. Now we're up over seven. And while investor loans are getting close to eight, maybe mom and dad are high sixes. And some of them are going to jump now, because six is better than seven. But that will be a very small window, and I think we've already seen that come and go. The rest of them are going to be like, whoops, we missed the window again. You know, we got bad luck. Some of them are going to FOMO. Oh my God, Casey, I just thought of this. Some of them have saved 3.5%, 5% down. Let's just call it 20 grand.