Tom Ferry and David Childers discuss housing affordability in San Diego. Mortgage rates have dropped about 1 percentage point since January 2025, and a recent government move to buy $200 billion in mortgage-backed securities briefly pushed them lower. They debate whether that's sustainable and explore policy ideas like tax incentives and assumable mortgages to free up inventory.
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I have the David Childers with me. We're in San Diego. David just got off stage. And I watched a couple thousand people, both in the US And Canada, do what I love. Every time you speak, they go like this, hold on. And then I see a whole lot of this click. So I thought what we would do is we'd spend a couple minutes. We're on Facebook, we're on Instagram, we're on x, we're on YouTube. Everybody knows David Childers from Keeping Current Matters. I want to talk about three things. I want to talk about affordability. I want to talk specifically about mortgage rates. And I want to give some insight for my friend watching of what should agents, team leaders, loan officers, what should everybody be doing right now? Because there is a lot of redefinement happening right now in our space.
Sure, yeah, yeah. So let's back up because I think affordability. I said this when I spoke just a minute ago. It is the biggest issue that we face in this country that Americans are concerned with. Here's why I know that election night, two and a half months ago, every politician is talking about affordability, Right? And that's what, that's how this country works. People get upset. Politicians are like, I'm going to fix your issues, so vote for me. And yes, let's hope they can. Right? We want them to fix these housing issues.
My smirk is it's called the psyop. Right. Tell you what you want to hear, right?
Totally.
And then you're going to give me votes.
And everybody does it, right?
Everybody does it. Both sides of the aisle. I'm not being political, but for sure, it's an infomercial. But, but, but wait, there's more if you act now.
Here's the great news about that. Politicians are focused on it because Americans are upset.
Thank goodness.
And two, we can bring the truth in the news to people. Yes, that's the win in.
Yes, I agree.
So don't make a mistake about that. But affordability is the biggest issue now. We've seen some things even in the last week, help with affordability, mortgage rates, and we're going to talk about that. But I think if we're not talking about that consistent, consistently and sometimes we think in the business. Well, I've already said that people already know what that is. You know, one day you and I were together, it was probably a year ago, and I think it's applicable today. You could do a weekly show right now on. Here's your latest update on prices, mortgage rates and inventory and crush it in 2026. Right. The market report 100.
And, you know, we did that certainly during pivot, during the pandemic. We're living every week and, you know, every week it was a new insight. But we were just reminding everybody, hey, hey, we're, you know, we're stuck inside.
Right.
You need to be reaching out to your clients. I mean, we said that for probably 45 days before people could go out and start to sell houses again. So I think the first key insight for you, my friends, is do you have a show called how's the Market? This week in Albuquerque, New Mexico. This week in, you know, La La La, Linkin park, you know, Chicago.
Right.
So affordability is only three things.
Yes. Right.
It's home prices, it's cost of money, and it's wages.
Yes.
So let's talk specifically about those three things, wages.
There's probably a fourth category coming, which is insurance, thank you very much. Which are screwed up in this country right now.
I concur.
The rising. And I'll tell you right now, and I get this question, a lot of times I don't see a lot of good solutions.
I don't either.
I mean, taxes are tough. Insurance is even tougher.
So, okay, really fast out there. If you're in the state of Florida or you're in the southern part of Texas, do you know what we're talking about? If you're in the state of California, trying to ensure you're home today. Florida. I had a buddy who just told me that his insurance cost for his $1.4 million condo is now $120,000 a year.
Yeah. Yeah. So I think you're going to see some things happen there. You know, I think regular deregulation, politicians stepping in, all those things I think will happen with insurance.
So.
So mortgage rates. Let's talk about this. If you go back to January of 2025 to January today, we've come down a full percentage point. Yes. On the average home in this. Well, let's take a round number. $500,000 borrowed. Half a million dollars borrowed. Yeah. That's a $400 savings if you're in a smaller market. Cut that in half, you say it's 250 borrowed, that's $200 in savings. Larger market, you can do the math easily on a monthly basis. Yes, totally. But I was with a large mortgage bank yesterday. What a point does as well are 100 basis points. One percentage point brings about $100,000 of buying power back into the market. That's something that People are missing right now because we go, hey, 400 people, $400 cheaper. Well, guess what? Whenever you look at a house, you know what you like. Right. The one that's just a little bit more expensive. Right. So now you can potentially afford what you really like and that's a good thing. That's why when you start to look at this, that's why forecasters are saying, hey, look, we'll probably sell about 10% more homes in this country because they'll be a little bit more affordable. Not going, hey, everybody's going to be able to buy a house and you get a house and you get a house. Not that scenario, but it will bring more people back in the market.
And by the way, if we go from 4.7 to 5.2 million, you know, new construction plus resale, that's a nice little lift. Yeah, you know, we've been, we've been in a 38 month mortgage route. If you go back to September 2022, the last time the rates were below 6, it put the freeze on everybody. So now we're seeing some freedom. But I want to ask you this question. When I look at the data, it feels like for the vast majority of consumers, it's about six months after that everybody goes. You know, the rates have been in the sixes for a while. We've been in the fives for a while. I think it's time. Why is that? Failure to get the news out. Is it, you know, obviously we're not looking at like, well, people aren't ready.
Sure.
I mean, it's just, it seems like it takes six months before everybody goes.
Hey, things are more affordable, I think in my life and I don't know the exact answer to that, but I think a lot of times you start thinking about something like we should do it. Like I don't know if we should do it. And down the road you do it. Yeah, right. But, but I think there's two opportunities in that. One, a seller opportunity to say, hey, things look different right now. And if you want to be on the market before inventory does rise, now is the time for buyers. So there's a way to talk about this to get people engaged. I mean, it's a gift that we've been given in our business.
I agree. So let's go back to mortgages and I want to talk specifically about the 10 year and the administration saying we're going to buy $200 billion worth of mortgage, mortgage securities and how we saw an immediate whiplash in the marketplace.
Bang.
5.99 which we haven't seen in what feels like, you know, almost three and a half years.
Sure, yeah. Which is true.
Is that real? Is this just a moment in time? Like it was just an announcement. It wasn't like he actually did it.
So there's, there's two things that were said in the last week. One, and we'll talk about this in a minute or the, you know, Wall street buyers, that's how much we're going to talk about that in just a second. Good. But let's talk about the administration came out and said, you know, we're going to tell Fannie and Freddie to buy $200 billion in mortgage backed securities. The market loved it. It drove mortgage rates down. So I was on a live the end of last week and the question was, is this sustainable?
That is the question.
So the way I answer that is everything in the mortgage market is based upon incoming information. If you could tell me what's going to happen tomorrow then I can tell you if this is sustainable.
Is there going to be a war, is it going to be a crisis? Whatever the job market.
What, what I know in, in this. Let's go into politics for a second carefully. What do we know is that anything could happen on any day, right. Could be said, could be done that moves markets. I think we will go through 20, 26 in the low sixes in the 30 year fixed mortgage dip our toe in the fives. And that was what we talked about a minute ago is be ready for that. This is the market to be ready to be opportunistic. Right. If I know that's going to come up and I have a buyer, I'm like, okay, here's what I see in the landscape. This will happen again. I don't think we're in the land of fives now. I don't think, I don't think so either. Business. We could be at six and a quarter tomorrow but we will get these opportunities that we want to jump on.
So let's talk about Trump coming out and basically saying I'm not going to let private equity, you know, these, these big hedge funds, Wall Street, I'm going to be, I mean it sounds good on paper. Sounds like a psyop because the, the reality is that probably should have been said in 2008.
Yeah, yeah, right.
I mean if you look at the run between 2009, 10 to 2012, 13, that's when the vast majority of properties were acquired. Now I know more have been acquired since but I mean the vast, because Remember we were talking about, hey, all they're gonna do is they're gonna hold that for five years, then they got to turn that money.
Right?
Right. Because that's what they do. And then they said, screw it, we'll just have to be long term rentals.
Well, there's two things that I would say about that. One, back then, we should look at Wall street as coming in and helping to save our business. Right. If they don't buy those homes, what happens? Two, don't miss this fact. If you're listening, the reason they do this is they know housing is a great investment.
100%.
That's the part that we sometimes miss. So, you know, did a quick video for keeping current of last week on this John Burns research, which is probably the best in this builder category and certainly Wall street category. In the third quarter, 3/10 of 1% of the purchases in this country were through what they. The, the technical term is institutional investors. They own more than 100 properties. So you're not talking about a sizable amount. The majority of investment property and investing in this country is through mom and pops. Yes.
People like us.
Yeah. And so it's more of a sound bite of, you know, let's demonize this group of investors. And it being Wall street, that's easy. Today, billionaires. Right. But it has no meaning. But again, I would go back to every politician, regardless of their position, side of the aisle is focused on housing affordability, and they should be, because it's the number one issue that Americans face. And that is a good thing.
So why not then, why not then go to the mom and pops, the Tom and Kathy Ferry. Right to you, to all the. My stepmom, right. And say, I got an idea. If you will sell 25% of your single family residences. Yeah, you get that? With no taxation.
Now what you're talking about is, I want to make sure I understand this is a rational idea.
I know.
Sorry, my bad.
But no, for my friend out there, watching wherever you are, are, whether you're watching live or you're watching later, if you were told that you could sell, let's say you own four rental properties and then your primary residence and you were told you could sell the one that you've owned the longest, that probably has a 2.5 mortgage that you never took any cash out of, you're sitting on hundreds, maybe millions of dollars in equity that you can sell that and not have a capital gain.
There are not good ideas like that that just would need to be.
Would you do it? That's what, that's the question would you do I want to see in the comments later. Yeah, that makes sense.
I think there are, there, there, there are a couple things that would free up the market. One, some sort of advantageous tax benefit to investors.
Exactly.
That would free up the market. There's a lot of people working right now on assumable mortgages.
I know.
I was with Lance Lambert in New York just a month ago and, and that was a big topic. You know, the other topic that a lot of people want to beat up right now is build to rent.
Yeah.
And it's really. Build to rent is not taking place of, you know, people that would buy a home. This is a customer that maybe says, hey, I'll spend a couple hundred bucks more to not be in an apartment. Yep. You know, and most, you know, don't qualify at that time for a home. So I think there are ideas and solutions. I do think politically this will get a lot more pressure and oh, by the way, this is 2026. We're starting the two year window of the next presidential election cycle. That's the good news, right?
Is it, is it, is it the good news I want to see in the comments? I don't think so.
And this will be the centerpiece.
It is the topic right now, both sides of the aisle.
The reason I bring this up, Tom, the reason we were talking about, that if we know what's most important to Americans, we know that Americans trust individuals by and large to get information from not, you know, mainstream sources. And that's not some weird statement, that's just truth. Today podcasters.
Exactly. Local real estate professionals that are willing to say, here's what's happening in my market. Here's the details you need to know. And that don't always finish with, by the way, do you want to buy and sell?
Right. So, so that's the opportunity, that's the show. Right. Here's what's happening in our market. This is the most important piece. I want to make sure you understand every dynamic. I agree.
I would even argue it would warrant. You could warrant a daily show on this Week in Albuquerque.
Yeah.
You know, today in Albuquerque, today in Albuquerque, just every single day go live like we're doing here. We're using Restream.
Right?
Restream. So we're on Facebook, Instagram, YouTube. What else? LinkedIn. Oh, and X. Right. So we're on five different channels simultaneously. For a little easy piece of software, if you did this once a week, it'd be amazing if you did it like once a week On Mondays at 5.
Yeah, yeah.
You're now CBS, right. You're. You're CNN, you're Fox, whatever, you know, like. And I, I do agree. The person that does this the most we know over time becomes the most trusted advisor in the market. Consistent.
Right. It's consistently being that voice.
Take me back. You said assumable mortgages. We've been talking about this for a while. Do you think it actually translates into policy?
Well, I don't think it's a policy issue. The issue with the suitable mortgage. There's two things that are talking about right now. Assumable and portable.
Yeah.
I think portable is much less likely because there's. You're not going to have a lot of banks to go. I think that's a great idea. Right. They're going to lobby against that. Yeah. Assumable. There's already. And I don't have a. Committed to a large percentage of loans that are assumable.
Yes.
The challenge with it is subordinate financing. The second lien behind that first and everybody got burned in 08. We want a second lien. Right. That is what's being attacked. And how does our banking system or just our entrepreneurial system work in this country? There's opportunity. We can make money. So there is a. It's called Rome. Jimmy and I were talking about it. There's a guy that was at Open Door, he started a company called Rome.
Rome, like Rome wasn't building the day.
Yeah, yeah. I think it's roam. We can find the website.
Yeah.
What they are doing is they are trying to build a marketplace for assumable mortgage. Nice. Here's what they know.
Didn't suitable AI or suitable.com also try and do the same thing?
Maybe. So I, I don't know if that's. Yeah. I don't know if it took off. The issue has always been the secondary finance. Yes. Now what they know is if we can get a home that has an assumable mortgage, we can take care of the secondary financing. We can sell that for a premium. Yes. That is the, that is the truth. Now in that premium, what Rome is doing is saying hey, we'll split the premium with you buyer or whatever the case is. But I think that's the opportunity that will be much more likely in, in the coming year, coming 24 months, that, that becomes something that unlocks a portion of the market.
So remind me as a historian of the market, I remember listening to, I want to say it was an eight track but it was probably an audio cassette of an audio cassette program my dad released sometime in the mid-80s. And the opening of the audience that went like this, you know. Hey, welcome. This is Mike Ferry talking today about listing and selling real estate in a high interest rate environment.
Right.
Right now that rates are finally down to 16 and a half.
Right.
Like that was the opening of this like six cassette audio program. And one of the entire cassettes was about wraparound financing, which was assuming somebody's mortgage. You got a mortgage at 10, we want to. And so was it wraparound? I forget the term that was.
I have to go back and look. I don't know exactly.
It'd be interesting. Maybe you go to Propaganda, Plexi today or GROK or whatever, your favorite eye tool, and say when in the 80s. And what did they call it?
Yeah.
Because it just feels like again back then, because it was. Because the rates were just so incredibly high.
Yeah.
That you could, you could assume somebody's loan. So. So there's precedence for this.
Yeah. You can do it today. You know what I mean? And, and that there are hurdles to it. But I think, I think an idea around investors, like you said, hey, you, you can forego capital gains on this. An idea around more assumable, you know, mortgages, things like that happening will start to come to fruition. And again, I think in this two year cycle, and I was tongue in cheek about this will start up, the presidential sort of push will start this year. It will be the number one time. I agree.
I agree. All right, so let's. First of all, if you're watching. Thank you. I'm trying to do more of these lives. It was one of my 2026 commitments and I got my friend David here. So who better than. Talk to the expert? David, let's just wrap with. If we were sitting in front of a great friend of ours today who is an individual real estate agent, a team leader, a broker. Let's just rapid fire. What are two or three things that we would say? Obviously the first one is a daily or weekly show talking about the market. What else would you recommend?
So let me give you a couple things that I would do right now. People are watching this live online for however long. I would go back the day and time. I'd go back to last year. So today is January 14th. Go back to January 14th, 2025. Look at the average 30 year fixed mortgage. Look at it today. Take the average price point in your market and say this just happened. Homes just got 200, 300, 400,000 or $400 cheaper per month or you just got a hundred dollars or $100,000 more in buying power. I would do that immediately.
All right, give another one. Because I have a really good idea and I have to write it out first. We'll see if it's a really good idea.
Second, I would implement a frequent strategy on the market update, and I would do three things. I would do prices, which we can pull every week, every day at the analysis. I would do mortgage rates and I would do inventory. Because what are people concerned? How many homes are out there to buy? Are they going up as fast or are they crashing? Right. And is it affordable? I remember affordability is the biggest issue. Those three things, if you incorporated them into a sort of a routine daily, weekly, whatever your frequency is, that wins in 2026.
I have a crazy idea. Try this on.
I would go to promptcowboy.com yeah, you told me about.
Or prompt AI, Delta, prompt Cowboy AI, something like whatever, you'll find it. And it's a. It's a prompt engineering tool. So I can go there and I can literally say, ready? Help me build a prompt that will help me build a affordability index meter for Dallas, you know, Dallas Highland Park. And what I'm going to do is I'm going to feed it every week. I'm going to feed it maybe every day. So I'm going to just keep telling, like I'm talking to the promise, exactly how I do it. I'm going to feed it every day. Today's mortgage rate and what is happening right now in terms of home prices that have sold and closed at that price compared to a year ago, two years ago, three years ago. And the meter that I want you to build is going to move right to left from red bad to green good. And I want it as a widget on my website. And then Prompt Cowboy will literally hear that it will build the prompt. Then I'm going to put it into lovable, or I'm going to put it into quad, and it's going to build the little widget for me that I can now put on my website and every day feed it.
The third element, am I being too crazy? The third element of that is the Fed tracks wages. Oh. So. And it's good news. It's good news. Daily, monthly, quarterly, quarterly. But what we know is people are earning more at a faster clip.
Yes.
The inflection line, kind of like coming up to 2020 for wages is like this. And then 2020 hits, right? We know that people are making More money, it's harder to find help. All those things kind of goes like that. So you'll get a little bit of help in that. The wage component, I agree. But I think you can build that, and I love the idea.
Yeah. And maybe even quarterly gdp. So I think any. Any sort of larger insights that you can dump into that. But could you imagine in your town if you were the only agent, the only team, the only broker, who on their website had an affordability index that was showing people, now it's not the time. Hey, it's getting good. Oh, my God. You better buy now.
Right, Right.
Based upon affordability. And I think you're exactly right. Like, I would actually create the affordability show. I would do the Dallas affordability show, the Newport beach affordability show, the, you know, wherever I am in the world affordability show. And I would talk about it at least once a week, but I'm crazy. I'd probably do it daily.
I mean, but I want to know.
In the comments, what would you do? What would you do? See it. I want to see it in the comments.
This is the biggest issue. Affordability in this country is a big issue. Right.
Everything is more expensive.
Right. But. But we can control our world, and we can deliver the truth.
Yes. So let's end with that. You can deliver the truth. You can deliver the truth. You become the knowledge, bro. You become the source of truth. This is why I literally just said to a couple thousand of my besties in San Diego, our dear friend and mentor passed away a few years ago. Steve Harney, right? Who is just a mensch of a mensch. Like, just such a superhuman. And I would call Steve all the time. Like, man, I'm reading the tea leaves.
And I don't understand.
He was my guy, right?
Yeah.
David is my guy.
Now.
I call David and I say, I don't understand. I'm seeing all this change. Why is the Northeast doing this? Why is this doing that? He's like, it's because of this, this, and this. If you become that person in your marketplace, I mean, at the end of the day, knowledge is power.
But the.
The context of the right knowledge at the right time gets you deals and opportunities, get you referrals, gets you all the things you want. So let me know in the comments, should I keep doing these live or should I just blow it up and do more YouTube? You. You let me know. And if you don't follow David Childers on all the great social channels, make sure you do that sometime today. David was, you know, spelled Exactly. Childers. Child ers. David Childers. All right, we're out. Have a wonderful. What day is it? Wednesday. All right, let's go.
