NEVER BEEN WORSE: Home Price/Income

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Michael Zuber (1:00)

Alrighty, folks, he's back. A series that we love to do, Mark the Financial Firefighter goes through the comments, takes out the spicy, the hateful. Sometimes he even throws in a good one or two.

But I hear today we are starting with payments, and prices, and rates, and somebody who thinks I'm an idiot. So, let's hear it, let's hear why Mike Zuber's an idiot this time.

Mark (1:24)

Well, I'm glad to be back. I saw you did one with Gus, and there's a little more...

SPEAKER_1 (1:29)

More Q&A, definitely different.

Michael Zuber (1:31)

More Q&A.

Mark (1:32)

All right, so this one is on your video. Home sellers give up and cut prices big time. So, this individual comments, sellers are finally realizing that buyers can't afford current asking prices. The medium home price is well above median incomes, and yes, income matters. How you think buyers qualify for mortgages?

Banks use incomes in their qualification process. Only a small percentage of people actually buy homes with all cash. I know these are all hard concepts for you to follow. Try to keep up.

Michael Zuber (2:05)

Well, he's a dick. She's a dick, one or the other, for that last comment. But really where this comes from very likely is Nick from Revencher Consulting has convinced people that only two numbers matter in a three-number system. Now, of course, Nick talks income and prices, and he constantly puts out prices are 5X income levels. And that is an absolutely irrelevant number, unless we all pay cash for homes, hence this person's dig at me.

And what I've always tried to get you guys to understand is it's about the payment.

The price of the home and the income without the third component interest rate is irrelevant. It's like an incomplete equation. So, the first part of that comment is absolutely right. Banks look at income to see if you can afford a home. But they don't look at the price of the home, they look at the payment, not the price of the home. So, Nick is still wrong. This commenter is still an idiot.

I agree with you, it is affordability, it is payment, and thus, it is income, price, and interest rates. Affordability absolutely matters. But when you talk about price and income without the third number, it's an incomplete equation. So, for most of that comment, this guy is arguing exactly what I want, and then he gets a little snippy at the end, because he just doesn't understand that he's agreeing with me. Banks worry about payment. It's not the price of a home. I don't care how many times you call me an idiot. Banks don't care about the price of the home, other than their appraisers. They care about the payment. So, they care about interest rate, price, and income, all three.

Mark (4:00)

Funny you mentioned Revencher. I didn't save it here, but I did see you posted on X. It looks like he's moving back into number one, for maybe your viewers watching again.

Michael Zuber (4:11)

Yeah.

Yeah, he's back to number one. Thankfully, he's only one of two Doomers. There's another Doomer on the list, but he's the number one Doomer. He's always been the number one Doomer. He is such a Doomer, guys. He is buying a home. He bought a home.

How much Doom do you have to produce to buy a home? How? I don't know how anybody could watch his stuff and not feel like you got slapped in the face. Mr. King Doomer, do nothing. Listen to me. Blah, blah, blah, blah, blah. It's crashing 50 percent.

Bought a home. You guys are fools. He is laughing at you. He laughs at his viewers. He has to. He's been telling them for years it's going to crash. It didn't. And now he's buying a home because the guy is rich producing doom. This is, this is capitalism. It is this. It's the, it's the sad fact that you can produce doom and buy homes, right? He produces doom, part of the capitalist system, and then buys a home. It's amazing to me that this works, but good for him. Good for him. He's a, he's a, he's a very good doomer, and he bought a home for it. So congrats to him.