Ep 163: Where are Mortgage Rates Today and What Does the Future Hold for Real Estate? With Josh Mettle

What we, what we can conceive in our mind and believe that we can accomplish and then go after. All of a sudden the universe acquiesces and we start to reach success and get on our journey.

Welcome to the Next Level Income show where it's our goal to take your income, your investments and your life to the next level. I'm your host, Chris Larsen. If you haven't yet, get a copy of our book for free at our website, next level income.com. that's www.nextlevel. just click on the book link and I'll even send you a copy if you put your address in. On today's show, we have Josh Metal. Josh is an industry leading author and mortgage originator, ranking in the top 1% of mortgage originators in 2020 by mortgage executive magazine. He has a passion for empowering home builders with financial literacy and guiding them on their journey to financial freedom. His drive to help create successful homebuyers and investors is illustrated in his book why Physician Home Loans Fail, as well as this podcast which I've been on the Infinite Financial Freedom podcast. Josh resides in Park City, Utah with his wife Hillary, his kids Xander and Arya, and Cosmo the wonder dog. Josh, great to see you again. Welcome to the show.

Chris. Thanks for having me. I'm excited to be here. We've had a exciting year in the economy, real estate and mortgage. So I'm excited to get it with you, brother.

Yeah, no, I'm, I'm really excited to talk about it because I think this year has, has brought some, some surprises that we're going to get into and kind of talk about the state of the market. We're going to talk about where mortgage rates are today, maybe talk about where they may be going in the future. But before we do that, I'd love for you to share a little bit about your background, your podcast, what you have going on. Josh sure.

Well, what makes me a little bit interesting, I believe, is that, you know, I've been in the mortgage business for 24 years now, my mug, so I, you know, I get the luxury of seeing the, the financial situation of clients all across the country and having over two decades to kind of look at how those financial changes have, occur, have occurred relative to savings indebtedness, credit card balances, student loans. So I kind of get to see the pulse of the economy on a, on a family by basis over long periods of time. So that's kind of interesting. And the other thing is, you know, Chris, as you know, I had the great fortune My mother and I started buying invent properties 23 years ago now. And we too stupid to sell any of them. We seem to never be able to time it right. We thought we were going to be flippers. That didn't work out for us. So we ended up being holders and you know, lucky, lucky us 20 years later. It looks like a beautiful strategy because obviously real estate's done very well over the last two and a half decades. And so, you know, we, we own, manage and really operate day to day operations on about 144 units. Everything from houses, condos, fourplexes, aplexes, 32 plexus. So a lot of residential, small commercial buildings. We own, we own an office building, we own a retail center that has tenants like Big 5 and GameStop and other things like that. We own a bunch of medical office buildings. So we, we really have our fingers in everything, real estate, mortgage. And of course with our fingers in those things, we watch the economy very, very closely. So I'm happy to share today and hopefully I bring a unique perspective.

Yeah, no thank you. And that's, look, that's why we have you on because you're not, you're not just in the mortgage business, you're in the real estate business and you're not just in the residential business, you're in the commercial business as well. So you have a really nice cross section that you get to see. As you just mentioned, we're as we record this Fed, the Fed just raised rates again a quarter point yesterday. Interest rates share a little, I get by the way, if, if, if you don't, and I'll put this in the show notes, I get Josh's weekly update on mortgage rates, which is fantastic. It's a nice little snapshot. Do you mind kind of sharing what we're seeing this week, Josh?

Yeah, I mean, you know the, the Fed doing everything they can to slow down this economy, which has been surprisingly resilient to me. I was absolutely in the camp believing that the 500, 550 basis points now raise in short term rates, which is the fed funds rate. So, so first of all, let's start there. When the Fed raises rates, let's be really specific on what that is. They control the fed funds rate, which is the over 24 hour interbank lending rate. So if I'm a bank and I just made a bunch of big loans and then I had a big depositor, maybe one of the companies that did banking with me left me. Now all of a sudden I don't have enough Liquidity to, to, to match the, so I can go out there to another bank and I can borrow from them at the Fed funds rate. Now the rate that the Fed sets, although it's only a 24 hour rate, and although it only directly impacts interbank lending, it is kind of the benchmark for all other kinds of rates. So although the Fed doesn't have direct control over mortgage rates or car rates, the impact in the Fed funds rate has repercussions across interest rates, across not only the US economy, but the global economy. So what we're seeing is the Fed using that Fed funds rate or interbank lending rate to slow down the pace of the economic tension in the economy. Because if I'm a, a homeowner and I have a home equity line of credit that is directly impacted by the Fed rate, so perhaps like me had a home equity line two years ago that was at one and a half percent and I'm like, I want to borrow as much as I can at half percent and then I'm gonna go buy more properties and I'll be able to make more cash flow from those properties than my one and a half percent home equity. Well, my wife reminds me every month that that home equity line is now at 8%.

Good wife.

So that's an illustration of how that, how there's, you know, when the cost of borrowing goes up, I'm going to be less likely to use those funds and that slows down economic. But think about it from a larger perspective. Let's take that same illustration and say that I'm Tesla, let's just say for example, or some other huge company. And I'm thinking about building another gigafactory that's going to cost $5 billion. And when I was initially making that decision, decision if I should make that investment of $5 billion, it was predicated on the cost of capital being 3%. And those numbers worked. But now if that cost of capital is eight or eight and a half percent, meaning my borrowing cost has doubled or tripled, perhaps I decide now's not the right time to build the gigafactory and then we don't build the factory, there's less orders, there's no real estate commissions, there's no loan commissions. All contractors who would have got that business didn't get the business. All of the economy that would have been built around the gigafactory doesn't happen. And so the Fed uses this funds rate to slow down the growth and the borrowing inside the economy. And we are seeing the Fed Continue down that path. Because today, Chris, you're probably well aware this news came when you were on your mountain bike or right before you Ryan mountain bike this morning. But you know, the durable good orders, which is things like cars or goods that are durable and going to last more than just a year or so, that was up more than expected. The GDP report came out at 2.4% growth which was much more than was expected. So it appears the continuing unemployment claims went down. So everything that we measure. How is the economy doing, seems to surprisingly still be growing. And as long as that happens and as long as the unemployment level stays stable and low, I would expect the Fed's going to continue to raise those short term rates to slow the economy.

Yeah, that was a great overview. And you know, it's one of the things we look at is can we borrow at a rate that's lower than inflation? You know, borrow lower than what a cap rate is on a property. If you can, that's a good deal. Right. If, if I'm going to lend you at 2 or 3 or 4% and inflation like it was last year is double digits or close to double digits, you're essentially getting paid to borrow, which is, which is great. But now we're getting to the point where I think C. The CP the last CPI print was 3.9. It was under 4%.

I believe that's right.

Yeah. So it's back in the, back in the, the three handle here. So massive drop, right? Like 600 basis point drop over a year almost. So you know, it's. Yeah, things are, things are slowing down. But I, what you just said about the economy is interesting. I was on a panel last year towards the end of the year and you know, there's all this talk about how there's this, this coming economic slowdown, coming recession in 2023. And I was one of the lone voices in the woods that said I don't see it coming. And the reason is I, and I think we talked about this when I was on your podcast, Josh. There's a real estate cycle that we can trace back all the way to the 1850s, 18, 18 and a half year real estate cycle. And we hit the midpoint slowdown of that cycle, which was in 2020, which is no surprise to people with COVID and all that. Typically the economy rebounds, specifically the real estate market rebounds in the second half of the cycle. And we see a lot of things that support that, like infrastructure, spe. Like we just saw this huge trillion dollar infrastructure bill that the government Signed. If we go back to almost 20 years ago, early 2000s, even though interest rates rose like we've seen here in the past couple years, similarly back then, real estate prices continued to rise. So I'm going to read a headline here. Maybe we can kind of kick off the next portion of our, our discussion. Just got this earlier this week. It said halfway through 2023, the new home market continues to surge. Now, this is from the same group, Tom, that was predicting a slowdown this year. Despite pessimistic sentiment coming into the year, the industry has performed much better than anticipated. Some of the reasons for this residential market, we're undersupplied. Days on market. I know it's specific, but looking around here in the Asheville area, days on market are low, supply is low, buyer demand is still there, and year over year, prices are up in housing prices, even though interest rates are up significantly. What are your thoughts on that?

I want to quickly comment on something you said previously because it's so important that people picked up that little gold nugget that you dropped, which was that when you can borrow at a rate that is less than the rate of inflation, it's like you're getting paid to borrow. And Chris, you're, you're an expert in this. You, you, you're an investor, you learned these lessons not only through text but through your own investments. And you've seen over a period of time, oh my gosh, the payoff was huge. But I just want to, really want to just quickly put a feather in that because what happens in times of higher inflation is that there's more dollars circulating around the economy. So household at a faster pace, there's more dollars that are being borrowed, especially when interest rates are low and when you can, when you can borrow low at a fixed rate and it doesn't have to be fixed for 30 years, it's fixed for seven years or 10 years, which is often the case in commercial lending. And let's just say we could borrow at 3%, which is the situation I was in two, two or three years ago when we bought a bunch of medical office buildings. But the rate of inflation was moving higher, you know, 4, 5, 6, 7, 8, moving very high. What that inflation enabled us to do was raise the rents. So my mortgage payment stayed the same, a 3% mortgage rate, but the rents each year. And this is commercial, but it would be very similar in residential. We had a built in 3% increase in rents every year or CPI, whichever is greater. So there were times when I had a 3% fixed rate for 5, 7 years, but I was getting a 6, 7, 8, 9% rental increase each year. And I'll just tell you that's the recipe for getting wealthy. If you can, if you can lock in your debt and you can exponentially move up your rents, the delta between those two, the real wealth occurs. So I just wanted to, and then over long periods of time, you, you, you amplify that. So I just wanted to make sure that everybody understood why it makes sense and why it's like getting paid to borrow when you can borrow at a rate lower than the rate of inflation. Because that was so important. That's like one of the most important lessons in 24 years of real estate investing I've ever learned. To your question, what the heck's happening in the residential lending world? How, how is it that despite all of the, the Bash Brothers videos, housing crash and, and all of this negative news, I mean, Diane Olich, who is the chief correspondent for CNBC Real estate has been on a seven year mission to, to call the next housing crash. In fact.

She'll be right at some point.

Yeah, at some point. Right. She's going to be right. She's called 18 of the last zero housing crashes. You know, she just is relentless.

What's the saying? A stop clock is still right twice a day. That's it. She'll get it right. She'll get it right at some point.

She's going to be right at least twice a century for sure. But despite all of these claims, the housing market has done nothing but go up. And we saw in the fourth quarter of 2022, we saw housing. And really in the third quarter of 2022 appreciation slowed. And in some markets that were really valued, we even saw numbers go down. So let's just take Salt Lake City as an example because I think is representative of probably a lot of markets. From June of 22 to the end of the year 2022, we saw median home prices go down about 7%. Now median is a little dis. Misleading because Ms. Median is just the middle point of the sale. So let's just say you had five sales. The median would be not the highest, not the second highest, not the lowest, not the second lowest. The middle of all of those sales went up. People tended to instead of buy the $500,000 house, they bought the $150,000 house.

Yep.

So median prices came down. It would be fair to say that overall prices probably contracted a little bit, but, but perhaps not 7 or 8%. Here's what's really interesting, Chris, between January 2023 and the end of May 2023, we'd already recouped 6% of that gap. And I believe by time we get the July numbers, we will be back to the same median price and probably the overall sales price that we had in, in 2022. So how is that possible? How is it even possible that we can go from 2.75% on a 30 year fixed mortgage rate to at the high, we were as high as seven and a half on a 30 year mortgage rate. How can mortgage rates go up 250% in a year's time? In less than a year's time, we have just a marginal dent in home prices. Yeah. And mind you, that 7% contraction on the median home purchase, Salt Lake City, Utah was one of the fastest appreciating markets in the entire country. I mean, we were right up there with Austin and the top of those markets. We saw 18, 20% appreciation multiple years in a row. It was crazy. Yeah. So let's get into the reason, because that was your question. Why, why has the housing market been so resilient? And this really just comes down to a couple of Factors. Factor number one, for the last 10 years, going back to 2012, 11 years now, home builders have built less homes. Those are called those new housing completions is what that's called. They've built less homes or there's been less household than there has been household formations. What's a household formation? Household formation is I have two children and we're all under one roof. We have one household. But when those kids get to 18 and my wife and I kick them out the day they turn 18 now. But when they move out and they have their own household now, now we have three households, so that's two household formation. So we've been four households then. We have been building homes for the last 12 years in a row. You have this mass supply of, of Millennial that are followed by the next generation that also have very high birth rates and home builders haven't been able to keep up. So it's, it's two, it's demographics. There is a big pickup birth rates from my generation, Gen X to Millennial, and there's a consistent birth level then on Gen Z. So you've got demographics and household formations going upwards and you have number of homes being built going downwards during that 10 year period. And we just don't have enough homes. It's econ one on one, supply and demand.

Yeah, that's a phenomenal. Point, and we've talked about it with respect to the apartment market, the multifamily market, it's the same thing, right? You have people that are 20, 25 to 34, that are renters, and around that 30 to 35 range, they're typically forming households. They're either looking for an apartment or builder, rent house to rent, or they want to buy a house. And the problem is there's one, there's not enough homes. Two, there's not enough apartments. And the big problem, as you know, in Salt Lake, is that this is region specific. So, you know, you and I, Josh, are talking about the country as a whole. But there are markets where, you know, Texas, Florida, California, that, that we need a massive number of these. Whereas, you know, the Northeast, they may be building homes there. That's not solving the problem in the Southeast, for instance. And then as you mentioned before, now that rates are up, you know, over two times what they were, the cost of paying for that home through a mortgage is expensive. So we have this, this squeeze. And then on top of that, and I love how you highlight the millennials because they're actually, if you look at, it's not quite as high of a peak as the baby boomers, but the millennials are actually a bigger generation than the baby boomers. And we all know what the baby boomers have done to the economy and, you know, as they spend money. But now the baby boomers are selling their homes. And you probably know this because you see them moving out there and they are vying with the millennials for the same properties. So it's, Millennials are really, really getting hit from all sides when it comes to trying to find a place to buy. And I think, like you said, what that means is when there is a property available, even if it's more expensive, they're going to buy it because there's, there's just not a lot of options out there.

Yeah, compared to what? I mean, that's the question. You know, I watched a video, a social media video yesterday that was really well done. It was done by a young millennial. He had to be in mortgage or Realtor investor because he was very knowledgeable. And he pointed out that, you know, from the 1990s through 2000, I think he was, to 2019, home values doubled nationally, but incomes went up and mortgage rates went from seven to three or seven to four. So if you look at it from a debt to income ratio perspective, even though home values doubled, the payments were about the same because mortgage rates went down. And incomes went up. Well, if you compare 2019 to 2023, we've seen home values pretty much double again that very short period of time. And mortgage rates have more than doubled and incomes have gone up, but they have pace with that move.

Not as much.

So, you know, but here's the point I want to make around that. He was coming at it from a perspective of victimhood like, this isn't. This is unjust to the millennials. And yes, it probably is not fair. I mean, it was certainly easier for me in Gen X to buy a home and then refinance to lower rates along the way. But the victimhood mentality that isn't fair is not serving one millennial. It doesn't. We don't live in a world of unicorns and rainbows all the time. We have to say, okay, here's the facts today. Does the facts point to higher home values in the future or lower? Okay, I know that time in the market makes people more wealthy than timing the market. I'm going to figure out how to buy a home, and I'm going to get five roommates. And that may suck for the first two or three years, but guess what? In two or three years, your home's going to have appreciated. I promise you. You're going to have an opportunity to refund, refinance to a lower rate. You're going to have built some equity through appreciation and amortization, and then you get to move that equity to the next. So I would just. I would just offer to any millennial or, or young person out there that hasn't been able to get into the game, the victimhood mentality will serve you figure out how to get in the game. There are ways to house, hack and get in the game, Josh.

That's a great point. I was just talking about this yesterday on another podcast. When you get what your mind focuses on, and I know we talked about mindset on your podcast as well. And if you're focused on, like you said, being a victim and how you can't do this, you can't afford this. This is a problem. Your mind is not focused on how to solve the problem. And when I speak to groups, I talk about the next level income strategy, which is make, keep, and grow. And the first part is make. And I stand on stage and I tell people, hey, you gotta. You gotta become accredited, which means you got to make it at least $200,000. And I see people that maybe they were a teacher or, you know, they're at $50,000, say, a year. And they're like, chris, how can you say that? I said, well, that's, that's. It may not be something you want to hear, but it's the truth. You need to make more money. You need to create value in the world. You need to help people out that will allow you to make money. There's so many ways to do it. It may be difficult. It may take several years to do. It took me five years to break in and really establish a position in the medical device industry after going to college and getting a med biomedical degree and getting an MBA then on top of that. So we're talking 10 years, right? So people are like, oh, it's easy for you to say, but it's like, well, it took a decade of my life to get to that point. So if you are listening, focus on the solutions. Nextlevelincome.com, we got tons of resources, tons of great podcasts with people like Josh here to, to help you take that first step. So again, just to underscore that, you got to focus on the solutions. If people are around you and saying things like this, this individual, then you got to eliminate them from your life and surround yourself with people that have solutions.

That is. That is absolutely right. And here's the question to ask ourselves. Why is it? Why, regardless of the economic situation, times throughout history, some people have been able to figure it out and move their, their economic class from wherever they were born in the world to a higher place. How is it they were able to do it? And why is it that I believe that I cannot? And the thing for me, Chris, and I bet this is true for you, I can almost guarantee you got like this. When I started to intentionally put myself in the middle of people that were more successful than me, vastly more successful for me, after a while I started to ask myself, why not me? Like, Chris is a really smart dude, but I can see what he's doing, and I don't think what he's doing is beyond me. It just. It's going to take some work. Like, I got to go back and get after it. But if Chris can do it, why can't I do it? Right? And once you start to. This goes back to Napoleon Hill's thinking. Grow rich, right?

The.

The. The greatest quote I believe I've ever heard in my life, maybe other than Hillary telling me that she loves me, but besides that, the second greatest quote was Hillary Clinton. What's that?

Hillary Clinton. No, no, no, no, I'm joking. My wife. I know it's your wife. I know, but not everybody knows that. That's listening.

That would be awkward. That would be awkward. But the quote that I was referencing was what a man can conceive and believe he can achieve. And remember, this was written 100 years ago. So she changed. Exchange man for woman. Doesn't matter the sex, what they were talking about mankind and what we, what we can conceive in our mind and believe that we can accomplish and, and then go after all of a sudden the universe acquiesces and we start to reach success and get on our journey.

That's, that's fantastic. I love thinking. Grow rich. It's, it's one of the books I have in my cabinet over here. My wife gave me the Alchemist when we first met, so.

Good.

Yeah, there's a quote in, in the Alchemist where. And I may, I may, I may be paraphrasing here a little bit, but it's when you believe with all your heart and all your mind, the universe will conspire to help you achieve that. So again, if you're focused on, on something that you can't do, you're not going to be able to move in that direction. People may be saying, oh, woo, woo. Like this sounds like some voodoo stuff that's out there. But you know, whether it's, whether it's subconscious, whether it's energetic, or whether it's just the fact that you start to talk to people in a different way because you're out there looking for solutions and surrounding yourself with the individuals and the information. Yes, it, it, it does work over a period of time.

And Chris, this all starts with curiosity.

Yeah.

You know, I know in my life I, I was fixated at times in believing that a thing must be true. And as I just kind of softened my, my grasp on that thing having to be true, and I just started to kind of wonder, like, I wonder what else is possible. I wonder what else could be true. As I did that. That's interesting. The lower, my hand button came up as I did that. Yeah, zoom's out. Thanking me. As I did that, I started to see things that I didn't see before. And then I got curious like, well, I wonder, wonder how they're doing it. And then I started to hang out with those people and it, it all kind of snowballed from there. So it starts with curiosity and it starts with asking yourself, like the question I wanted to ask this, this guy on social media was, you know, how could you get into the housing market? You just told me it wasn't fair and all the disadvantages. And I, I get it, but how, how could it be possible that you could buy your first investment property? How it be possible that you could house hack and get your own home? So, so if you find yourself feeling like it's impossible and everything's stacked against you, I encourage you to get very curious on what else might be true.

I love that. And then the final piece is, you know, you said, you used me as an example. You said, hey, Chris is doing it. Why not me? Well, when you find somebody that, that seems to be achieving or is achieving what you'd like to achieve, reach out to them, ask them. And what's amazing is I think a lot of times we assume that people, they're successful, they're busy, which is usually true, but they don't want to spend their time helping others. And what I found in my experience, Josh, is it's been the opposite. So feel free to reach out. And today with the Internet, there's just a plethora of information. There's coaching programs out there. We have a course on our website, you know, that you can access for pretty much. It's, it's accessible to anybody that's out there, and that can really help you. Josh, I know you got a flight to catch. Any predictions about where you think the market's going? Do you think we're at the top? Do you think we got a couple more years ago, like I do? What, what are your thoughts? Any, any, any data you have around that?

Yeah. I'll go back to what got us here, which was this extraordinary appreciation. And in the face of seven and a half percent interest rates, the market still seems in most markets to be either sideways or going up. It's certainly not crashing. Maybe if you live in San Francisco and there's a tech exodus, but those are really the, the outliers. If you're talking about most, most cities across the country, they're doing very well. That is because we've had more household formations than we've had home completions. And as long as that stays true, the housing market will stay incredibly resilient. Now, on top of that, and I don't see any end to that in sight because the cost to acquire land, the process of going through municipality approval, the impact fees, the, the municipalities put very tight restrictions on density in most areas of the country. So that slows down the number of housing units coming to market because they just can't build affordable, small, very dense product. So it limits what can be built as Long as those things stay the same, I believe you're going to see a very resilient housing market. And I do believe that we're going to see at some point the Fed is going to strangle the neck of the economy. And in every recession going back to the Great Depression, when you go into an economic recession, inflation goes down because there's less money circulating around the economy. And when inflation goes down, mortgage rates go down. I think what we're likely to see over the next 12 to 18 months is the Fed wins its fight against inflation to the detriment of the economy. We go into a recession, that recession will pull down mortgage rates. And here's a stat that, that everybody should be aware of. A 1% reduction in mortgage rates. So if we just Simply go from 7 to 6%, 5 million more people qualify for homeownership because the payment goes down. And that means you have more renters come off the sidelines into the market. Yes, when we go into the next recession, there'll be less people that have jobs. Maybe we lose 2 or 3 million jobs in the economy. But if million more people are eligible for homeownership, that's going to push more demand into the housing market. So yes, I believe the housing market continues to be very resilient. And I want to show you just one slide.

If I could just, I'll make sure you can share here. Go for it.

Yeah, this, this, this was a game changer for me. And, and I think everybody should, should really, really contemplate this slide when they're thinking about the market. So let me, this is part of the upfront market analysis that we, we do with, with clients and people in our coaching group. And so let me just walk through this. These are decades on the left hand margin. So we've got the 40s, the 50s, the 60s, all the way down to the 2020s. And what you'll see going from left to right is the appreciation rate. That's the upward movement of housing values. And this is national data. This came from the S P Case, Shiller and the Bureau of Labor Statistics. And we, that data was aggregated by a company that we subscribe to called MBS Highway. So these are considered the gold standard in terms of home valuations nationally. And, and you'll see that in the 40s if we add up the cumulative appreciation throughout that decade, housing was up 129%. Now we don't have this data for 41 and 40 because it kind of became available in 42, but 109%. No losing years. 50s we had nine of the 10 years positive appreciation. 1955 was flat. Values didn't go up, they didn't go down. They just stayed exactly the same. But we ended the decade with 36% appreciation. How about the 60s? Appreciation every year, 23%. How about the 70s appreciated every year 130%. How about the 80s? Appreciation every year, 77%. Okay, the 90s we had a re, we had the, the SNL crisis. This was like a pretty significant recession. Home views were down 1% in 1990 and, and less than 1%. It was like 0.5% in 1991. Still finished the decade up 30%. Okay, how about the 2000s? 2000s had a roaring start to the, I'm sorry, the 2000s had a roaring start up and through 2006. And then we saw, we saw five consecutive years of depreciation in home values, 2007, 2008, 2009, but we still finished the decade. Chris, if you owned your home from 2000 to 2009, you were still up 66%. And then we started the 2000s down in 2010 and 2011. But if you held your home from 2010 to 2019, you were still up 45%. And then we've started the 2020 up 10%. 19% and 2022 finished the year up 6%. I think 20, 20, 2023 will be low. Single digit appreciation by time. We finish the year 2, 3, 4%, something like that. But here's the point. If you were trying to time market, like imagine if you sold out in 90 or 91 and you, you waited for the next down year, well, you would have had to have wait 14, 15 years for the housing market to go down. And if you, if you went through the Great Recession and said, well, going to, I'm going to wait this one out, I'm going to wait till the next crash, you would have lost another 45%. And the housing market, if you look back since 1942, we have 73 years of positive appreciation, seven years of depreciation where home value went down and one year 1955 where the housing market was flat. That's a 90% win rate. 90% of the time values in the United States, if you look nationally go up and I know somebody's going to say, well, yeah, but in, you know, Los Angeles or in Miami, okay, there are coastal areas that are outliers. They're cyclical markets where they have huge runs and huge pullbacks. But Most of us are across the country. And, and, and what I showed was very emblematic. So the point of that is, Chris, that if someone is waiting for a crash to get into the market, they are likely to be waiting a very long time. And I think figuring out how to get in the market, while rates are high, mortgage rates are high, there's a little less demand for housing, there's a little less competition. You might be able to get some concessions, you might be able to get a discount, take the advantage of a little slower market right now when rates are high, refinance when rates are low and keep that property for a long period of time. You're going to do beautifully.

That's a great point. And look, I think it applies to residential, applies to commercial. If you have, if you have a long term view and you're cognizant of where we are in the market, don't go crazy and buy something you can't afford and say, well, I gotta buy now because you know, this is my only chance to do that. Especially if it's your home that's an emotional purchase and people, they mix up, they're like, oh, this has got a, this is my biggest investment. A home isn't really an investment. Right. It's, it's a purchase. You can be smart about that purchase to your, to your, we'll call him your friend on social media. Imagine if he was able to find a way, like you said, to bring in some roommates, buy a home, you know, have, have roommates in a home that, in a property that he now controls and then when rates go down, refinance, then he lives by himself or maybe he's married at that point. Look, my first house, I had two roommates. You know, I was, I, I, I did it as well. Yeah. So you get creative, you could buy a fix, fixer upper. You know, there's a lot of things that you can do out there and you know, fixer upper, house hacking. Those are two of my favorite strategies for new home buyers that are out there. Josh, I want to make sure you catch that flight, but I want you to tell people about your podcast, how they can subscribe to your weekly updates that I get and anything else that you can share with our audience here before we go.

You bet. Thanks Chris. The pleasure with you here today and I hope everybody got a lot of value out of this. So two, two things I'll give you. You can subscribe to the Infinite Financial Freedom podcast where that you get your podcast. I'm sure we're there. You can google it as well or you can just shoot me an email if somebody has questions. If somebody an analysis on a location, a particular we do a a really detailed neighborhood report that pulls professional analytics from a tremendous amount of data sources and we're happy to create that for you. You can just email me@josh metal.com Josh met and I'm happy to help you in any way I can.

And we'll have all this in the show notes as well. Josh Josh, always good to see you my friend. Hopefully we can catch up next time I'm out your way and beautiful Salt Lake City. Have a safe flight and thanks for sharing your information with the audience today.

Thanks brother. Look forward to seeing you on the mountain bike.

Hey Chris, here again. I hope you found this episode valuable. Now I have one more thing to gift you. We have a page for my coaching clients where you can get a free copy of my book as well as much more from previous guests on the show. Just check out nextlevelincome.com coaching to get a free copy of my book, audio book, and much more. I'll send you a copy of my book and cover all the shipping costs as a thank you for listening to the podcast. Also, please like share and take just 90 seconds to give us a rating on Apple Podcasts.