In this video, Jason Hartman provides a detailed commentary on the current U.S. housing market, beginning with a Wall Street Journal report that existing home sales rose 9.5% in February – the first consecutive monthly increase in over two years. He explains that the surge occurs despite a severe inventory shortage, with only about 500,000 homes for sale versus the roughly 1.2 million needed for a balanced market. Hartman then references a Fox Business segment with Neil Cavuto and real‑estate expert Jared Guy Randolph, discussing the significance of keeping mortgage rates under 7% and the three possible outcomes for borrowers (rates rise, stay flat, or fall). He emphasizes that affordability will not improve without new supply and urges buyers to act now if they can afford a home. The conversation shifts to the National Association of Realtors (NAR) commission lawsuit and its likely fallout. Hartman predicts that the settlement will fragment the Multiple Listing Service (MLS), making it harder for consumers to shop for homes, increasing transaction friction, and putting upward pressure on rental rates. He also speculates that lenders may need to adjust loan processes to cover buyer‑agent commissions. Further discussion covers the impact of commission percentages (6% vs 5% or lower) on broker behavior, suggesting that lower commissions will force agents to work harder and could improve service quality, while also potentially driving some agents out of the market. Throughout, Hartman critiques media coverage of the commission issue, arguing that journalists misunderstand the industry and mischaracterize the lawsuit’s effect. He concludes that the real estate market is heading toward a period of “absolute chaos” due to fragmented data, reduced MLS functionality, and ongoing supply‑demand imbalances, but he expects these dynamics to create both challenges and opportunities for buyers, sellers, renters, and brokers.
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Greetings from Tampa, Florida. Isn't this a beautiful view from my hotel room? It's just a perfect day outside. Perfect Florida weather. All right, so a couple things. Number one, sharing this piece from the Wall Street Journal, 9.5%. That is how much existing home sales surged in February from the previous month, making the first time in more than two years that sales increased for two consecutive months. Now, what does that really mean? That's existing home sales. See, the problem we have had with existing homes, not to be confused with new home sales, is of course, we have suffered from an extreme lack of inventory due to the lock in effect and all these people with these cheap mortgages that just won't let go of those houses we wish they would let go. But inventory has increased ever so slightly. We're still hovering around half a million homes for sale in the United States. We need about 1.2 million homes to be at the quote, unquote, normal level. And that is what we need. And if we get to six or seven hundred thousand homes, I would absolutely welcome that kind of market. We need more inventory because then we can have a more robust market where there's more activity and more existing home sales, not just new home sales. Whereas new home sales are making up some of the largest share of the market ever, as we've reported on before. So this is good news. 9.5% increase in existing home sales. And let's go on to the next piece. Now, you hear me talk about some of this stuff a lot, but I want you to hear it from other people, too. And that's why I want to share this short clip from FOX Business with you. And let's just dive into this for.
Just a few moments, keeping an eye on interest rates. If you are looking to buy a home, you're still under 7% on a 30 year fixed. It's backing up a tad. But so far the drill is if you can stay under seven, you'll you'll still keep interest. Jared Guy Randolph is the real estate business and financial expert.
That's Neil Cavuto Partners.
He's the CEO. Jared, that tends to be kind of like a quasi rule of thumb, keep it under seven things good, goes over seven things not so good. What do you think?
Here's what everyone needs to realize. The sky is not falling. If you were to pay 7% today, there's three things that can happen for you as a purchaser in three years from now. The interest rate, 10% you won because you're at 7%. They stay at 7% you're locked in. They go down to 4% you're you refi. The key is, is if you can afford the home, get into the market today. The affordability crisis and the amount of stock that we have in the marketplace is not going to get better at any point in time. Find something you can afford and get into the market today. But being under seven. Yeah, that's the key right now and that's a good number to come in at.
What about being under different number 6% when it comes to the realtors cut of the price on a home finally agreed it could be down less. But. But what about that as a factor for potential buyers and sellers?
Realtor commissions are not going to have any pack any impact on home values. That's because we have a supply demand issue. There is more demand than there is for supply. And what they realize with this ruling around the real estate brokerage commissions, it is actually a negative and it is not going to benefit buyers and sellers because you need a professional to help.
Okay, so a couple of comments on this. Number one, I really like the way he outlines the different things that you can do, the different options you have if you take a mortgage at today's what we consider to be higher rates historically they're not that high. But we think they're high because compared to what we're all comparing it to just a few years ago during the COVID era. Of course. Right. And so they seem very high. He outlined that very well. And then he talks about how the supply demand dynamics and the housing affordability problem there is really, and this is me saying this, but there is really just no data to suggest these two problems are going to be resolved anytime soon. Or anything that says oh suddenly there's going to be a whole bunch of new supply. Or anything that says housing affordability is going to get a heck of a lot better in terms of price. Right. I think he meant that although he didn't say it exactly. But in terms of price there is just no data to support this whole crash thesis that we've been hearing about for years and it still hasn't come. And all the crash Bros. They look like complete idiots right now. Granted, someday there will be a correction. There will always be an adjustment. There will always be cycles in the market. But right now with the dynamics we have, there is just no data to support this idea in anywhere near the near term. But then he talks about overall affordability. Right. And so the affordability could increase dramatically if mortgage rates go down. And remember 1% in mortgage equals about 10% in price, or 10% in price equals about 1% in mortgage rate. Typically, you know, that's a very rough rule of thumb. But if that happens, if we see mortgage rates come down a whole bunch or even a little bit into this very low inventory market, it's like kindling. It's like tinder for the brush fire of housing prices. Right. If you look at it from that comparison, that's what would happen. We would see housing prices rise very, very quickly because they've been rising in this last two year period as we've had increasing interest rates. Just imagine how much they all increase. If housing affordability goes up a whole bunch due to lower rates, we will see really big increases in housing prices, not the very respectable price increases we have seen already during these very high rate times. So that's really interesting how he says that. Now he's talking about the Realtor commission lawsuit, which we've reported on a lot on the show, this NAR lawsuit. I mean, so many things are going to happen here and I've discussed it already. But one of the things that is definitely going to happen is that it is going to become much more difficult to shop for a house and to buy a house. Why is that? Well, because all of the data is about to become much less perfect than it has been. Imagine if you're in the stock market and you want to go buy stock in Exxon, okay? And suddenly you can't just go to one broker and have access to to the stock exchange where all these shares are traded, right? What if you had to go to several different stock exchanges kind of the way you do in cryptocurrency, really, if you think about it, although those prices are a fairly perfect market, the price is not exactly the same on every exchange, of course, but the Exxon stock price is the same exact price, no matter which brokerage house you go to, because you're buying it from one exchange. And that's kind of similar to the way it works with the A multiple listing service. But now that all is about to become very fragmented and very siloed. And again, this is my prediction as to how it's all going to turn out. I mean, there's a lot more to it than this, but this is just part of it. So it is going to become increasingly difficult to shop for a home. It's already hard enough because affordability is so difficult. But imagine now, it's not like you can just go to any Realtor anymore. You have to go to this Realtor for the properties they have. And then you're going to have to go to another real estate company for the properties they have and the properties they have. Absolute chaos is coming to the real estate market, folks. And what this is going to mean is it's another barrier to buying a house. And that's going to mean that we're going to see upward pressure on rental rates because a lot of people are just going to be lazy about it. It's hard enough to buy a house with a multiple listing service, even if you can afford a house, because just shopping for a house is a big giant task. It is about to get a lot more difficult. And unless the lenders make a huge adjustment to pay the buyer agent commissions as part of their loan process, which I predict that they will. Okay, that's one of my predictions. I predict the way mortgage financing is going to be done even in the agency loans, the Fannie Mae, Freddie Mac loans, that's about to change. Where they're going to make some kind of accommodation to be able to pay a buyer' agent because of this giant NAR lawsuit and the subsequent settlement. So things are going to get really weird here, folks. I mean, it's going to get difficult to shop for a house. It's going to be very difficult for several years. There are just massive changes coming to the way real estate is sold in this country. It's going to make for a much less perfect market. And what do I mean by perfect? I mean the price being set by an exchange. There's a spectrum, right, of very fragmented markets where everything just totally imperfect, you know, nobody knows what the price of anything is. There's no data transparency, there's no mls, there's no Zillow. There's just nobody knows, okay, there's that. And then on the other end of the spectrum, I'd say one of the most perfect markets is the stock market. Now, I don't think the stock market is good. I think it's a complete scam. But in terms of perfect, if the stock is selling at $100 a share, it's $100 a share, period. End of discussion. That's the price. And Tomorrow, if it's $90 or 110, that's the price, then that's a perfect market, right? And there's very little room for opportunity in a very perfect market because the price is the price, there's no discussing it, okay? And real estate has always been this kind of middle of the spectrum asset class because every house is different. It's not exactly perfect, but you did have this exchange, the multiple listing service, which almost everybody participated and that really helped you get pretty good data. But now it's going to become just chaos. That's what's coming, folks. I'll keep reporting on it as time goes on. There's a lot more to it than that, but that's some of it. Let's keep listening.
There is more demand than there is for supply. And what they realize with this ruling around the real estate brokerage commissions, it is actually a negative and it is not going to benefit buyers and sellers because you need a professional to help you navigate the circus.
Yeah, but you don't, you don't need them at 6%. Right. Isn't that the best? There's going to be more wheeling and dealing. Right.
They don't take 6% home. And that's one of the key things to remember. That split between two sides.
I think everyone knows that. I'm just wondering why would that make you say not make a difference If I'm a seller, I've been thinking twice about putting my home on the market. Now. I know and you're right. I mean these things are negotiated. They've been negotiated it for years. A lot of people haven't paid the 6% whether it's split or not. But having said that, you don't think in the end this makes a difference? Actually, it could be very helpful. It could ignite demand. People think, hey, I can, I can score a better deal here.
Well, demand is still at an all time high and we're still on an all time low for inventory. So at this point in time, that is not have a negligible impact on the actual transactions that are happening in the market today. No, it is not going to have a major impact the way in which they think it is going to.
All right, so if you're looking to see a big difference in how realtors will work, do you think Realtors who heretofore might have been used to getting 6%, whether they split it with someone else and it's 3 and 3, I get all of that might not work as hard if it's 5%, 4%, they're.
They'Re going to have to work, they're going to have to work harder and what you're going to see happen in the Marketplace. I spent 20 years in brokerage before I became a developer over the last five years. So I understand that this game, there's going to be a lot of brokers who have come into the marketplace thinking it was going to be easy money. Who are going to get out there, some of the agents who have been in the industry for years who are going to leave because of the competition around the commissions. But it's going to force these good brokers to actually step up their game and provide a better service. So they do command top dollar.
Got it. Well said, Jared. Thank you very much. Very good seeing you.
You know, it's just interesting to hear Neil Cavuto and the media in general talk about it like, oh, they've eliminated percent commission. No, they haven't. They eliminated what they perceived to be price fixing. And listen, you've heard me say it many times. I think the commissions are too high, okay, on higher end properties. I mean, on these big expensive properties, like, does a realtor really deserve $90,000, you know, for selling a multimillion dollar house? It's, it's pretty crazy, okay? So I'm not arguing that point. I think those commissions are too high, okay? But I also think that's because the agents have to focus so much resources on marketing that, you know, they only have to do that because there's just way too many agents. Right? So, you know, this problem is complex, but the media is so misreporting on this. They just don't understand the way it works, which I guess is true in every industry and everything. You know, the media, it's not their full time job, they're not in the industry, they don't get it. Or they just intentionally are misleading the public. Because even like Neil Cavuto's comments there, they're just so sophomoric. Right. And I don't mean anything against him. I think he's a great journalist, but he just doesn't understand, okay? So that's that.
