Hi there.
I'm Mat Ishbia, president and CEO of UWM, and this is 3 Points.
First point: Selling Your Home is Getting More Profitable Again.
And so a lot of people still expect the U.S.
to fall into recession,
but the housing market, the recession might have already happened.
Think about this: In January, economists at Fannie Mae projected
that home prices would decline by 4.2% on an annual basis this year.
However, that projection has been revised
as home prices have come in stronger than expected, an increase of 3.6%
from the first quarter to the second quarter.
So what does that mean?
Profit margins on selling homes is up.
People used to sell their house in the first quarter
it was like $97,000 of profit.
Now it's $113K.
We're seeing the housing market being resilient.
People thought that would be surprising based on where interest rates are
and how rates are high, so people ...
No. Supply and demand.
Opportunity is out there.
Realize that this is good for us.
The economy is stronger than people think and housing is not as bad as people
like to think it is.
A lot of negative media goes out there. But understand.
Housing prices are stable. Values are good.
And when people are selling houses, they're making money.
So we're going to see more of that come, especially if rates drop a little bit, but
even now, as things are, we're seeing that opportunity out there in the market.
Second point: The Future of Interest Rates.
So we all spend a lot of our time thinking about what are rates doing.
Up? Down?
Well, July 26, the Fed raised its benchmark rate
by 25 basis points to a new range of 5-1/4 to 5-1/2.
Now with that happening, that's the 11th rate hike
since March of ‘22 and the highest the Fed funds rate has been in 22 years.
So what does this mean for us going forward?
What to expect?
A lot of people expect the Fed to skip the rate hike in September.
So we'll see what they do in November.
But right now, how do we think about rates?
What's going to happen with inflation and where rates are gonna be.
A lot of people are starting to expect
that maybe this is at the higher end of where rates are going to go
and that they'll maybe stall at this level and then at some point,
maybe in 6 months, 9 months, 12 months, 18 months, rates will drop.
And remember, rates don't have to go back to 3, 4% again.
They’ve got to go to about 5-1/2, 5.75% to make a massive refi boom,
a massive opportunity for so many people watching this video.
And so understanding what's going on in interest rates,
inflation and what policymakers are thinking is important.
And then you having a confident view of what's going to happen in the next 6, 12,
18 months to take care of your clients and grow your business.
Third point: The CFPB Rules a Concern in the Supreme Court.
So according to numerous briefs filed in recent weeks
in an upcoming Supreme Court case, the CFPB’s
funding structure violates the Constitution's Appropriations clause.
So, what does this mean?
I'm not going to get into all the legal mumbo jumbo.
But here's what I’m gonna tell you.
Why does this matter?
The CFPB, in the big scheme of things, has been great for our industry.
I know that not everyone believes that, but they actually have done great things.
The 2007, ‘08, ’09 crisis.
That stuff doesn't happen anymore in this market based on what the CFPB.
Now is the CFPB perfect?
No. They have a lot of flaws.
A lot of things they do that
I don't agree with and a lot of people don't agree with.
But understand that the CFPB being in place is good for all of us.
Doing good things for us, protecting us, protecting consumers,
protecting our industry and making sure housing
and the mortgage industry are strong for years to come.
So understand, how will this shake out? What will change?
I'm really not sure.
But right now, make sure our minds are, the CFPB has done good things overall.
Are they perfect? Absolutely not.
But they do good things
for consumers, for mortgage brokers, for mortgage lenders and for our economy.
Thanks for joining me.
I’m Mat Ishbia, president and CEO of UWM, and that was 3 Points.