October 29, 2025 • 31 mins
Mortgage headlines are loud, but the real story is quieter: confidence. We dig into why builder confidence is rising while buyer confidence stalls, how the Fed’s long “sugar high” of quantitative easing set us up for today’s rates, and what a softer jobs market—amplified by AI hiring freezes—means for mortgages over the next 6 to 12 months. No fluff, just a grounded look at the forces moving your payment and your plan.
Steve Reed joins us to unpack the data behind rate direction, explain why 3 percent mortgages aren’t coming back, and outline a realistic path from the mid-sixes toward the mid-fives if inflation keeps cooling. We talk through first-time buyer pain points—student loans, income thresholds, PMI—and the practical levers that still work: zero-down USDA where eligible, state assistance, smarter down payments to avoid PMI, and credit optimization that moves the needle. The message isn’t “buy now at all costs.” It’s build a strategy that fits your rent, your reserves, and your timeline, then move with confidence.
We also examine the government shutdown’s ripple effects on lending. In flood zones, stalled federal insurance snarls closings; elsewhere, FHA, VA, and USDA pipelines can slow even as well-capitalized lenders keep funding. The broader risk is timing and trust. In markets like Northeast Tennessee where inventory is tight and in-migration is strong, prices are unlikely to roll over even if rates ease—so waiting for both cheaper money and cheaper homes may be a myth. Looking to 2026, we see cautious optimism: steadier rates, more inventory, and better affordability at the margins.
If you want a mortgage plan, not a guess, we’re here to help. Subscribe, share this with someone on the fence, and leave a review telling us your biggest barrier to buying right now.
To help you to navigate the home buying and mortgage process, Jonathan & Steve are currently licensed in Tennessee, Florida, Georgia, South Carolina, and Virginia, contact us today at 423-491-5405 or visit www.jonathanandsteve.com.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
This is Benchmark Happening.
Brought to you by Jonathan andSteve from Benchmark Home Loan.
Northeast Tennessee.
Johnson City, Kingsport,Bristol, the Tri-City, one of
the most beautiful places in thecountry to live.
Tons of great things to do andawesome local businesses.
(00:20):
And on this show, you'll findout why people are dying to move
to Northeast Tennessee.
And on the way, we'll havediscussions about mortgages and
we'll interview people in thereal estate industry.
It's what we do.
This is Benchmark Happenings,brought to you by Benchmark Home
Loans.
And now your host, ChristineReed.
SPEAKER_01 (00:44):
Welcome back, everyone, to another episode of
Benchmark Happenings.
And today I'm excited to haveour um star of the show is Steve
Reed.
So welcome, Steve.
SPEAKER_02 (00:59):
Thanks for having me again.
I appreciate it.
SPEAKER_01 (01:01):
Well, I'm so thankful because I think that
just from our conversation, wereally needed to have a podcast
to talk about interest rates inthe mortgage industry right now
and also the looming governmentshutdown.
SPEAKER_02 (01:20):
Yes, it it's looming longer than we want it to loom.
Unfortunately.
Normally the when you see thesegovernment shutdowns, they're a
day or two and both sides kindof come together and because
everybody's got, you know, angrypeople on both sides that have
different self-interest.
And uh so it seems they'redigging their heels in a little
(01:43):
bit here.
So yeah, I'm glad you broughtthe topic up because we really
need to explore how it's gonnaaffect, you know, our industry
and other industries and justlife in general, I guess.
SPEAKER_01 (01:54):
Absolutely.
And I know a lot of the housingmarket rises and falls on
confidence, both from buyers andbuilders.
So, Steve, where do we where arewe on these key indicators?
SPEAKER_02 (02:09):
Well, confidence is really, I mean, it's it's kind
of hard to measure, but we dotry to measure it as a sector.
Um, you know, there's there'snumbers that come out and they
rank confidence like, hey, it's37%, it's 50%, whatever, you
know, whatever.
What's that mean to be 50%confident?
But I guess it makes more sense,pardon me, when you rank it
(02:34):
against other reports, like,okay, well, we were 50%
confident last month and we'reonly 37% this month.
So you can see at least if itgoes up or down.
So it's not really that much ofa tangible thing, although it is
a real thing.
Um so that's a great question.
And you know, one of the reportsI was listening to yesterday was
(02:54):
talking about builder confidenceand you know what happens with
you know with builders, they'vethey've got pretty good memories
of 2007 and eight when themarket really went down.
SPEAKER_01 (03:06):
That was a painful time.
SPEAKER_02 (03:07):
Painful for builders, a lot of them went
under, and so you know, the onesthat have made it back, they
don't forget about that.
And also, you know, just uh thevolatility of the of the market
that we're in now.
So with the builders, it'sgetting a little bit better.
I think I threw out that 37%number.
(03:29):
I think that's what it was a fewmonths ago.
And then uh yesterday's numberscome out a little bit better.
I think they were closer to 49,48, 49 percent.
So it's gotten a little bitbetter, which means, you know,
builders are, you know, they'refeeling better about putting up
spec homes and that kind ofthing.
They're not afraid as much thatthey're gonna just sit on the
(03:50):
market.
So that definitely helps withsupply.
And that's kind of you know, wegot into a big problem with
supply back after 08 and 09because we lost a lot of
builders.
The one that was the the onesthat were left were very
skittish to throw a bunch ofhouses, you know, come out of
the ground with a bunch ofhouses.
SPEAKER_01 (04:09):
So we were short houses.
SPEAKER_02 (04:11):
I mean, we were short for a long time, which
drove up prices, right?
Um, so the builders are comingback a little bit.
The other the other side of thatis you have buyer confidence,
you know, where's that at?
And uh that's that's stillstruggling.
I mean, people I talk to themevery day, just I'm out in the
real world here, and I havepeople calling in saying, you
(04:32):
know, houses are too expensive,I'm afraid to buy, I can't
afford to buy.
Um, and I don't have the numberon the buyer confidence right
now with me, but it's I can justtell you from being on the
ground that it's not great.
You know, it's not great becausepeople just feel like, well,
maybe rates will go down, priceswill go down.
(04:54):
Um, but but we'll see.
But at least buyer confidencehas or builder confidence,
excuse me, has come back some.
SPEAKER_01 (05:01):
Well, and that that's a positive.
I think a lot of buyers, Steve,uh and and when I'm talking to
people as well, it's always, doyou think rates are gonna come
down?
I mean, r really I don't think,and you can speak to this, I
don't think we'll ever see thosetwo and a quarter, two and a
(05:22):
half percent, three percentrates.
SPEAKER_02 (05:24):
Never, never in our lifetime, I don't think, you
know, just barring somethingunforeseen.
But if you just look at themetrics uh with the interest
rate market um and and just lookat numbers and more scientific
and that kind of thing, rateswill never be that low again.
Um but that's again barringsomething, some kind of World
(05:47):
War III or something like Imean, you know, something we
don't see coming, which is verypossible, but uh I really from
what we study and we hear fromthe economists, that's that's
who we study.
Um we don't see that everhappening again, but you know,
hey, it would be nice to to belower than we are.
Yeah that would be good.
SPEAKER_01 (06:08):
Yeah.
So what are you seeingspecifically in behavior from
the first-time home buyers inthis market?
I know that's been a bigconcern, first-time homebuyers.
Um, so what type what are youseeing in that behavior, Steve?
SPEAKER_02 (06:26):
Well, you know, I touched on that a little bit
because they're not confident.
They're not, you know, thefirst-time homebuyers in
particular are not thatconfident in buying a house
right now.
They're they're so expensive,the rates are higher.
Uh a lot of them are saddledwith a lot of student loan debt.
So that's that's an issue.
(06:46):
Um so so that's tough.
Um that was probably about 50%of our business, uh, if you
will, uh four or five years ago.
And for the last 20 years it hasbeen.
Um we just if we depended onfirst-time homebuyers right now,
we wouldn't be in businessbecause you know, right now we
(07:07):
have to depend on move up buyersor you know, that kind of thing.
Maybe people buying second homesor or whatever the case is, but
first-time homebuyers have beenpretty much locked out of this
market due to affordability.
Now, I'd love to have thoseconversations with first-time
homebuyers and say, hey, I knowit seems like a daunting task to
(07:27):
buy right now, and it is, andI'm not, you know, diminishing
that fact, but there's ways togo about it, and there's there's
ways it can be done.
We have a lot of differentprograms out there for them, uh,
different ways to get them in ahouse.
But, you know, think about it.
When rates were two and a halfpercent, three percent, I mean,
(07:49):
you could fog a mirror and buy ahouse.
You didn't even have to have agreat job, you know, the income
didn't have to be that much.
And there's also a study outthere that shows, you know, how
much your income need medianincome needs to be uh or income
needs to be to buy a medianpriced house.
And it used to be around here,you know, 40,000, 45,000.
(08:11):
Now it's about 70,000, 75.
So, you know, have the uhincomes went up double around
here?
I don't think so.
But the requirements have goneup, you know, you gotta make
more because of the rates andthe prices.
SPEAKER_01 (08:26):
And I can speak to that because when I was in the
Washington County 101 class, itwas very interesting, highly
recommend it.
When we were at the sheriff'soffice, uh Sheriff Keith Secton
Sexton was talking about thesalary, just the average salary
for officers, and I was shocked.
And he said now they've got themup to about 55,000.
(08:50):
So see, that still doesn't hitthat number you talked about of
70.
SPEAKER_02 (08:54):
No.
So you really have to have adual income family, right?
Dual income.
Um or uh dual income, eithermeaning the wife has to work or
the husband's got to have twojobs, or somebody's gotta make
70,000, 75,000, it seems like,to buy a house.
Now, are there people makingless than that buying houses?
Absolutely.
I mean, we've got THDA loans,we've got some lower income type
(09:18):
loans uh that can work in somecases.
Um, but we're just talking aboutthe median kind of buyer here.
We're talking about the averageprice house.
So uh I just I don't want folksto go away thinking, oh, I don't
make 70, so I'm throwing in atowel, because there's ways to
do it, but we're just talkingabout the biggest segment of the
(09:38):
population here that are havingyou know some affordability
issues buying a house, andthat's why, you know, push
button get loan, like throughsome of these competitors, is
not a real um stellar plan thesedays.
You need a mortgage consultantlike we are to be able to come
(09:59):
in and sit down and have realconversations.
It's not AI, it's not pushbutton get loan, it is
strategizing, it is getting goodinformation, getting treated
like you should be treated, uhtransparent information uh that
deals with certainty.
And if you do this, we can helpyou do this.
(10:21):
And uh so it's almost uh to mewhen somebody calls in, well,
your rate's a quarter percenthigher, an eighth percent higher
if it is.
A lot of times we're the bestrate.
But you know, it's almostlaughable because we bring so
much more to the table than youknow, a push button get loan.
Uh, we don't want customers tobuy a home and be uninformed.
(10:45):
We want educated customers.
Educated people are our bestcustomers, and I don't mean
higher education like you've gota master's degree.
I mean let us educate you andcome in and knowledge is power.
Then you buy confidently.
I don't know if you've everbought anything that you're just
not sure about, and maybe Ishouldn't have done that.
(11:06):
And that's not a good feeling.
I want clients that arehigh-fiving after closing, like,
oh man, this was a good move.
I wanted to do this and I knewexactly what I was getting into,
and it was transparent, it was acertain, you know, there was
certainty to it, and it shouldbe really a good experience.
But I bet you if you did a poll,I bet three out of four times
(11:27):
it's not a good experience justbecause of the way our industry
operates, and we just refuse tooperate that way.
SPEAKER_01 (11:34):
And yeah, and I'm I'm glad you brought that up,
Steve, because it really goesback to call benchmark, home
loans, calls call you, callJonathan, get you guys can call
Lauren if you're in Knoxville.
I mean, you guys will do thehand holding and really inform
the client, uh, the familyreally in what they need to do.
(11:57):
If they will let us love that.
SPEAKER_02 (11:59):
If they can get off of what you rate, what you know,
and all that's important, and wego through all that.
But you know, the I would love aquestion sometimes, and I've
never had it.
Hey, what's gonna be, what'syour strategy?
You know, where where are weheaded here?
So um, you know, that that'sjust the kind of clients we're
looking for that are I guesswhat you'd look for in an
(12:20):
employee or a partner orwhatever.
Hey, who's coachable?
Who you know, who wants tolearn?
And so we love to educateclients and uh we want them.
I've gotten to the end of theroad with a lot of clients that
we've been very successful onthe journey.
And uh I look at them and I'mlike, well, you could about be a
loan officer now.
(12:40):
You about know as much as I do,maybe more.
And and because they they werelike sponges and they wanted to
learn and they didn't come inthinking they they knew
everything, you know.
Um because I've done this 40years, I've seen a thing or two.
Uh so you know, I'm not tryingto say I'm the smartest person
in the room, but I've seen somany scenarios and situations
(13:02):
and so many missteps.
I want to keep our clients frommaking those mistakes, which are
costly.
SPEAKER_01 (13:10):
It's because you care and you know, you're
building that legacy.
We've talked about this.
You you do a loan for someone,then you eventually they send
their children, and even nowgrandchildren, and you know,
second-time home buyers thatwere someone's children, and
that's so important, but reallyit it goes back to the key to
(13:30):
success in life.
If you fail to plan, you plan tofail.
SPEAKER_03 (13:34):
Exactly.
SPEAKER_01 (13:35):
And that's all about putting a strategy in place.
No matter what you're doing,buying a home, working the
market and sales, and and theline of work that I do, it's all
about what what's your strategy?
SPEAKER_02 (13:47):
Yeah.
Um and I'm at the I'm at thepoint in my career.
I can't I really care about justone or two things.
That's relationships and makingsure that I help you if you're a
client.
So I care about a relationship,I care about helping you.
I don't need to do your loan topay my electric bill.
I've I've saved my money well.
So I, you know, hey, Iappreciate the business and we
(14:09):
can all use the income, butwe're not, you know, we're not
desperate.
We're we're here to help you,and we're truly doing it for the
right reasons.
SPEAKER_01 (14:18):
I love that.
I love that.
So I think we've talked aboutthis a little bit, but I wanted
to dive into it because it'sabout inflation.
So how does inflation and thejobs market impact interest
rates, Steve?
SPEAKER_02 (14:31):
Yeah, that's a timely question because you know
the feds uh the when I say thefeds, the Federal Reserve Bank,
they're kind of to the pointnow.
They're realizing that backwhen, you know, we were getting
our little sugar high from theselow rates.
SPEAKER_01 (14:47):
Uh because that's what is that the mortgage
bankers prayer, God give meanother refi boom and I'll save
my money better.
SPEAKER_02 (14:54):
Promise to save my money better.
Yeah.
Yeah.
Well, so we were all on the wewere all on that sugar high,
right?
So we were loving it.
Business was great, three, fourtimes what it is now.
And but the feds have they'vereally Scott Besson, who's um
he's the treasury secretary, butum Jerome Powell, of course, is
over the Fed.
(15:15):
But Scott Bessant's come out andsaid the their that candy high
lasted too long.
They called it QE, quantitativeeasing.
So the feds would jump in, andif you can imagine you've got 10
houses for sale and you're gonnaauction them off, but you have
no buy, you you have threebuyers at the auction, right?
So there's not a lot ofcompetition.
(15:37):
Uh your houses are not gonnasell for that much, right?
Well, it's kind of the same waywith mortgage bonds.
You know, we got in that periodwhere, you know, the investors
didn't have that much of anappetite for for mortgage bonds.
So what does the Fed do?
They're they got unlimitedpockets, right?
Because they got all ourtaxpayer money.
They jump in and they say, we'regonna do quantitative easing or
(15:58):
QE, we're gonna buy all thesebonds, and so the bonds are
gonna be selling great becausewe're gonna buy them.
That's gonna create competition.
Uh, we're gonna be at thatauction, we're gonna be buying
one of your, you know, all tenof your houses, or maybe nine of
them.
So we're gonna prop up themarket, right?
Well, that's what they didduring COVID, right?
(16:19):
And after.
Well, they did it for too long.
Okay, so the sugar high lastedtoo long, rates got to an
unusually abnormally low point,and the feds just kept on and on
and on and on.
And even us in the industry werelike, Well, this ain't good.
This is gonna be one heck of ahangover, right?
SPEAKER_01 (16:39):
Yes, I remember you saying that many times.
SPEAKER_02 (16:42):
Yeah.
So, I mean, while I was likingit, I mean, you know, just like
you know, if you're out at thebar late at night and you're
having a good time about two orthree a.m., right?
SPEAKER_01 (16:52):
People keep buying free drinks.
SPEAKER_02 (16:53):
Yeah, it's all good.
And you know in the back of yourmind, oh, this this ain't gonna
be good, but boy, it sure isfun.
Uh, you know, and then you wakeup the next morning and you're
like, oh heck, what did we do?
Well, that's kind of what theFed had done, and even Scott
Bessant's come out and said itjust this week, you know.
So that lasted too long.
(17:14):
And so now, you know, we'retrying to make corrections um or
have been for the last threeyears since 2022 to get off of
that hangover, you know.
So now we're kind ofovercorrecting almost, right?
So rates should really be lower.
But to answer your question withjobs and inflation, the Fed, you
(17:36):
know, they're so nervous aboutinflation.
It's about at a target point,it's maybe a little bit high,
but and the jobs are, you know,even though the Fed say they're
the same right now as they werein September, they're not, the
market keeps softening for jobs.
And we could talk about a myriadof reasons for that, but one of
(17:56):
the things is AI.
I mean, just banks come outtoday.
I was just reading a headline.
JP Morgan Chase has put afreeze.
They've told their bank managersto keep the headcount where it's
at, don't hire people, don't,and it's all because of AI.
Goldman Sachs came out and saidessentially the same thing.
Amazon and Microsoft have toldtheir employees and their
(18:19):
managers to brace for not addingpeople.
Um, so and it's all due to AI.
So if the jobs, you know, staysoft, and we lost 36 or 37,000
jobs on the last jobs report,which is a soft report.
We're not adding jobs.
So if that stays like it is,that's really gonna impact
(18:42):
rates.
Uh it's gonna be for lowerrates.
Now, if we get some strong jobreport out of left field or
something, which I don't seehappening, that could hurt
rates.
SPEAKER_01 (18:52):
Interesting.
SPEAKER_02 (18:53):
But right now, it looks like it's gonna be soft,
which is gonna be, you know,positive for rates.
SPEAKER_01 (19:00):
So when you talk about AI, are you are you just
talking about AI replacing a lotof the jobs?
SPEAKER_02 (19:05):
Yes.
Yes.
Okay, be able to do more withless uh headcount, you know.
And uh so we're gonna sseriously, to me, see the
impacts of that.
But it's just timely that you'deven ask that question because
like I say, I just read thatarticle just an hour ago talking
about the banks putting freezesand that's you know, specific to
(19:27):
my industry, but that's it'sgotta be across other industries
too.
It's not just the bankingsector.
SPEAKER_01 (19:34):
Right, right.
Yeah.
And so you know, and I thinkyou've touched on this too, but
the rate cuts coming from theFederal Reserve over the next
six to twelve months.
Well, so with all that beingsaid, Steve, is do you see any
rate cuts?
SPEAKER_02 (19:50):
Yeah, absolutely.
Absolutely.
I think we could see four orfive rate cuts in the next 12
months.
And when they when they do therate cuts, they do them in
increments of a quarter.
So they could come out and say,you know, hey, we're gonna do 25
basis points or a quarter ratecut, or we're gonna do 50 basis
points or a half rate cut.
Um so, but I think we're gonnasee at least four or five going.
(20:13):
Now we got two more Fed meetingsthis year.
I think one's on October 29th,the other one's sometimes in
December, maybe the 10th or12th.
I can't remember.
Don't quote me on that.
But we've got two more thisyear, and we may see cuts at
both of those, but it's allgonna hinge on how the feds are
feeling about inflation, howthey feel about the jobs report.
(20:33):
And, you know, we could we canget some numbers out of left
field, and you know, oh, okay,we added 100,000 jobs last
month, but they may come back amonth later and say, oh, we got
to correct that report.
So you could see some seesawingof rates, uh, but overall, um,
they've there they will trenddown uh going into next year.
(20:56):
Now, how much will they trenddown is you know anybody's
guess, but I think on the bestcase scenario, so if you
averaged them right now, if yougot a decent credit score and
everything, you're probablyabout mid-sixes.
You know, we may end up thistime next year in the mid-fives
if we're lucky, which is apretty good rate, you know.
SPEAKER_03 (21:18):
Right.
SPEAKER_02 (21:18):
Historically, the rates, you know, on a more
30-year mortgage is about wherewe're at now.
So uh if we got in themid-fives, hey, we're lower than
average.
Um, is that a huge needle mover?
For me, no.
I mean, you know, a percent, butfor a lot of people it's a
psychological thing.
And back to that buyerconfidence, right?
It seems to be psychologicalwhen rates are under six
(21:41):
percent, our phones ring more.
You know, people are like, okay,let's let's go buy a house.
And it does make it.
I mean, you know, if you'refinancing a you know, a$300,000
house, 1%'s gonna make, youknow, maybe$100 a month
difference, you know, orwhatever, maybe a little bit
more.
I should have done thatcalculation before we got into
this podcast.
But anyway, uh is$100, shouldyou not buy a house or not with
(22:07):
that?
I don't know.
But um, it's not gonna beearth-shattering where the rates
are gonna go, and again, not inthe threes, but with luck in the
fives, in the mid-fives, and Ithink at worst case scenario,
we're gonna be in the highfives.
SPEAKER_01 (22:22):
So now the million dollar question is now a good
time to buy, or should buyerswait for lower rates?
SPEAKER_02 (22:28):
Oh, you had to ask me that, right?
SPEAKER_01 (22:30):
Um, I just feel like people just put off and put off
and they're waiting for therates to drop.
So is now a good time to buy?
SPEAKER_02 (22:38):
Yeah, the short answer, yes.
Um, it is a good time to buy.
SPEAKER_01 (22:42):
Why is that?
SPEAKER_02 (22:43):
And because houses are not going to get any cheaper
around here.
Now, if you live in Florida,huh, you know, uh Miami's
market's got 9.7 months ofinventory.
So yeah, maybe wait until ratesdrop a little bit and home
prices go down a little bit.
But uh around here in the stateswe operate, I would say I would
(23:04):
have to qualify that.
If you're in a really good,you're gonna be shocked by this
answer, but if you're in areally good rental situation
right now, like I have peoplecome and say, well, my rent's
$500 a month, but I just want toown my own house.
I'm like, well, where you live?
Well, I'm in my grandma'sthree-bedroom, two-bath house,
and I'm like, I'm pretty sureI'd stay there, you know, and
(23:25):
save up money.
Because what a lot of peopledon't realize is if you can pay
more down, you know, where youcan sometimes avoid PMI
insurance, which can add$100 to$200 a month onto your payment.
Uh you can get a little bitbetter rate if you pay more
down, it you can make it moreaffordable.
So in some cases, if you're in adecent rental situation, you
(23:48):
know, save up for a little bitand prepare to buy, right?
Now, if you're out there one ofthose, which a lot of people
are, and you're paying a couplethousand dollars, you know, two
thousand twenty two hundred amonth for rent or eighteen
hundred a month, and you caneven get into like one of our
zero-down USDA programs that'syou know, and you might could do
(24:08):
it for sixteen, seventeenhundred a month, yeah, I would
buy.
Now, if you're somebody that'sjust looking to buy investment
property to rent, uh I don'tknow, I don't think I'd buy
right now.
You know, if I didn't have tohave a house.
Um, but uh a second home, eh, ifyou got plenty of money, deep
(24:29):
pockets.
Most people buying second homesare you know not worried about
paying their utilities, youknow, they're they got a little
bit more savings, that'sprobably a good time to buy.
It's probably not gonna go down.
But uh so it really depends onthat's not a short answer, even
though, you know, it just reallydepends on your situation.
And that's the kind ofconversation we like to have.
(24:52):
And that's our part of ourstrategy.
SPEAKER_01 (24:53):
Yeah, and it depends on the type of house you're
looking for, what type ofmarket, neighborhood.
And here in Washington County, Imean, people continue to move in
daily.
I mean, we are sure definitelyum population is growing here.
So the elephant in the room formany in business right now is
(25:14):
the government shutdown.
So how many days are we intothis shutdown?
SPEAKER_02 (25:20):
Oh goodness.
Uh a couple days ago we were init 14 days.
I think we're on day 17.
So, like I mentioned before,it's not a you know, a day or
two and then we're back.
So, so yeah, we're about 17 daysinto this, so it's dragging on,
you know, really more than wethought.
SPEAKER_01 (25:37):
So, how's this affecting um specifically
affecting the mortgage industry?
SPEAKER_02 (25:42):
Yeah, so uh it depends on what state you're in.
You know, Florida, you and Italked about this a little bit
the other day, you know, thegovernment flood insurance
program program, FEMA, uh, theycan't write policies.
So they can't close loans thatneed flood insurance uh unless
they're buying it through aprivate, you know, privately,
(26:03):
which is more expensive a lot oftimes.
So uh so that's really affectingall types of loans down there.
Um I haven't specifically spoketo anybody in that market, but
I've read articles and it soundslike a nightmare.
I would like to, you know, talkto somebody on the ground there.
Uh for us here, you know,Tennessee and the surrounding
(26:24):
states, you know, we have uhUSDA loans, you know, that you
have to do, and you know, thosecan get a little tricky because
they're operating with less of astaff, um, you know, FHA to get
those loans insured.
Um fortunately, we're stillclosing all those types of
(26:45):
loans, VA loans, because we can,as a mortgage banker, we can
close those and still fund themand wait to get them insured by
when I say insured, that not thehouse insured, but the loan.
So it hasn't affected us toomuch yet, but the longer it
drags on, it's not good for foranybody.
(27:05):
And uh not just the mortgageindustry, you know.
You got the air trafficcontrollers, I think their last
paycheck was yesterday, and theyonly got 70% of their pay.
So, how would you like to go towork and just get 70% of your
pay?
Well, what scares me about that,and I know this was not the
question, but I just want tokind of bleed over into another
(27:27):
industry here, but like for theair traffic controllers, I mean
they could just walk out, right?
Because they're not getting paidafter yesterday.
The way I understand it.
We're coming up on the holidayseason, right?
Americans we like to travel.
We do, right?
SPEAKER_03 (27:42):
We do.
SPEAKER_02 (27:42):
And so that could be like the bombshell of the whole
shutdown, because you know,whether you're on the left or
you're on the right, you'regonna be mad at your, you know,
politician if they don't getthis thing open because when
Americans can't travel, theywould probably get a little bit
testy, especially this time ofthe year.
(28:05):
You know?
So I see the government shutdowncoming to an end within the next
few weeks just because of that.
SPEAKER_01 (28:13):
Yeah.
SPEAKER_02 (28:14):
That one simple reason.
So uh and hopefully it don't dotoo much damage to us in the
mortgage industry before thathappens.
And I just pray for the peopleand you know, our mortgage
friends in Florida and peoplebuying houses down there that
you know it comes to an endquick.
SPEAKER_01 (28:29):
Absolutely.
So what's your outlook umoverall for the housing market
for 2026?
Because it's almost I mean, 2025is coming to a close and we're
upon 2026.
So what is that outlook, Steve?
SPEAKER_02 (28:43):
Yeah, I I'm a little bit more optimistic for 2026
than I was uh in 2024, thinkingabout 25.
So um so yeah, I'm I'm morepositive for but but it's really
for reasons that are notemotional.
It's really for more metrics andstudying the market and looking
at um, you know, the the jobsthing is gonna drive rates,
(29:08):
inflation, like we said, andthat's gonna all be um, you
know, that can affect in anegative way too.
I mean, you know, if job marketsdown, nobody can buy or people
that don't have jobs can't buyhouses, obviously, but it does
help rates and it helpsaffordability.
And so I see affordability, thatindex getting better in 26, you
(29:32):
know, get those rates in themid-fives.
Uh, I think we're gonna havemore inventory on houses, so
we're not gonna see such pricejumps.
I don't think we're gonna seeany declines around here.
Um, so I do I'm cautiouslyoptimistic for 26.
I think we're gonna be um Ithink we're gonna be looking a
little bit better, a little bitthe I think the market's gonna
(29:54):
get its footing in 26, and Isure hope so because I feel like
I've been in a heavyweight fightfor the last Two years in this
industry, and uh we're justlooking for uh brighter days
ahead, and I think we will havethem, and uh, and it's still a
great time to buy.
It's it's you know, we want tohave those conversations.
We want to be honest withpeople, and a lot of people,
(30:15):
believe it or not, I tell them,don't buy a house right now,
you're not ready.
You know, you're gonna be betteroff to wait.
Now, a lot of people I I say,no, you should have bought one
last year.
You know, it's like the oldsaying, when's the best time to
plant a tree?
You know, well, 20 years ago wasthe best time, the second best
time's today.
SPEAKER_01 (30:33):
Today.
Right.
SPEAKER_02 (30:35):
So that's kind of where I'm at with the with the
outlook.
SPEAKER_01 (30:38):
Yeah.
Well, thank you, Steve, for thatupdate and for being on today
and just giving us that just amore of a positive outlook for
2026 for more the mortgageindustry.
SPEAKER_02 (30:50):
Absolutely.
Maybe you'll invite me back.
Maybe we can even get Jonathanback here in the future podcast.
SPEAKER_01 (30:56):
Yes, that'll be fun.
Thanks, Steve.
SPEAKER_00 (31:01):
This has been Benchmark Happenings, brought to
you by Jonathan Tipton and SteveReed from Benchmark Home Loans.
Jonathan and Steve areresidential mortgage lenders.
They do home loans in NortheastTennessee, and they're not only
licensed in Tennessee.
This is Benchmark Happening.
Brought to you by Jonathan andSteve from Benchmark Home Loan.
Northeast Tennessee.
Johnson City, Kingsport,Bristol, the Tri-City, one of
the most beautiful places in thecountry to live.
Tons of great things to do andawesome local businesses.
(00:20):
And on this show, you'll findout why people are dying to move
to Northeast Tennessee.
And on the way, we'll havediscussions about mortgages and
we'll interview people in thereal estate industry.
It's what we do.
This is Benchmark Happenings,brought to you by Benchmark Home
Loans.
And now your host, ChristineReed.
SPEAKER_01 (00:44):
Welcome back, everyone, to another episode of
Benchmark Happenings.
And today I'm excited to haveour um star of the show is Steve
Reed.
So welcome, Steve.
SPEAKER_02 (00:59):
Thanks for having me again.
I appreciate it.
SPEAKER_01 (01:01):
Well, I'm so thankful because I think that
just from our conversation, wereally needed to have a podcast
to talk about interest rates inthe mortgage industry right now
and also the looming governmentshutdown.
SPEAKER_02 (01:20):
Yes, it it's looming longer than we want it to loom.
Unfortunately.
Normally the when you see thesegovernment shutdowns, they're a
day or two and both sides kindof come together and because
everybody's got, you know, angrypeople on both sides that have
different self-interest.
And uh so it seems they'redigging their heels in a little
(01:43):
bit here.
So yeah, I'm glad you broughtthe topic up because we really
need to explore how it's gonnaaffect, you know, our industry
and other industries and justlife in general, I guess.
SPEAKER_01 (01:54):
Absolutely.
And I know a lot of the housingmarket rises and falls on
confidence, both from buyers andbuilders.
So, Steve, where do we where arewe on these key indicators?
SPEAKER_02 (02:09):
Well, confidence is really, I mean, it's it's kind
of hard to measure, but we dotry to measure it as a sector.
Um, you know, there's there'snumbers that come out and they
rank confidence like, hey, it's37%, it's 50%, whatever, you
know, whatever.
What's that mean to be 50%confident?
But I guess it makes more sense,pardon me, when you rank it
(02:34):
against other reports, like,okay, well, we were 50%
confident last month and we'reonly 37% this month.
So you can see at least if itgoes up or down.
So it's not really that much ofa tangible thing, although it is
a real thing.
Um so that's a great question.
And you know, one of the reportsI was listening to yesterday was
(02:54):
talking about builder confidenceand you know what happens with
you know with builders, they'vethey've got pretty good memories
of 2007 and eight when themarket really went down.
SPEAKER_01 (03:06):
That was a painful time.
SPEAKER_02 (03:07):
Painful for builders, a lot of them went
under, and so you know, the onesthat have made it back, they
don't forget about that.
And also, you know, just uh thevolatility of the of the market
that we're in now.
So with the builders, it'sgetting a little bit better.
I think I threw out that 37%number.
(03:29):
I think that's what it was a fewmonths ago.
And then uh yesterday's numberscome out a little bit better.
I think they were closer to 49,48, 49 percent.
So it's gotten a little bitbetter, which means, you know,
builders are, you know, they'refeeling better about putting up
spec homes and that kind ofthing.
They're not afraid as much thatthey're gonna just sit on the
(03:50):
market.
So that definitely helps withsupply.
And that's kind of you know, wegot into a big problem with
supply back after 08 and 09because we lost a lot of
builders.
The one that was the the onesthat were left were very
skittish to throw a bunch ofhouses, you know, come out of
the ground with a bunch ofhouses.
SPEAKER_01 (04:09):
So we were short houses.
SPEAKER_02 (04:11):
I mean, we were short for a long time, which
drove up prices, right?
Um, so the builders are comingback a little bit.
The other the other side of thatis you have buyer confidence,
you know, where's that at?
And uh that's that's stillstruggling.
I mean, people I talk to themevery day, just I'm out in the
real world here, and I havepeople calling in saying, you
(04:32):
know, houses are too expensive,I'm afraid to buy, I can't
afford to buy.
Um, and I don't have the numberon the buyer confidence right
now with me, but it's I can justtell you from being on the
ground that it's not great.
You know, it's not great becausepeople just feel like, well,
maybe rates will go down, priceswill go down.
(04:54):
Um, but but we'll see.
But at least buyer confidencehas or builder confidence,
excuse me, has come back some.
SPEAKER_01 (05:01):
Well, and that that's a positive.
I think a lot of buyers, Steve,uh and and when I'm talking to
people as well, it's always, doyou think rates are gonna come
down?
I mean, r really I don't think,and you can speak to this, I
don't think we'll ever see thosetwo and a quarter, two and a
(05:22):
half percent, three percentrates.
SPEAKER_02 (05:24):
Never, never in our lifetime, I don't think, you
know, just barring somethingunforeseen.
But if you just look at themetrics uh with the interest
rate market um and and just lookat numbers and more scientific
and that kind of thing, rateswill never be that low again.
Um but that's again barringsomething, some kind of World
(05:47):
War III or something like Imean, you know, something we
don't see coming, which is verypossible, but uh I really from
what we study and we hear fromthe economists, that's that's
who we study.
Um we don't see that everhappening again, but you know,
hey, it would be nice to to belower than we are.
Yeah that would be good.
SPEAKER_01 (06:08):
Yeah.
So what are you seeingspecifically in behavior from
the first-time home buyers inthis market?
I know that's been a bigconcern, first-time homebuyers.
Um, so what type what are youseeing in that behavior, Steve?
SPEAKER_02 (06:26):
Well, you know, I touched on that a little bit
because they're not confident.
They're not, you know, thefirst-time homebuyers in
particular are not thatconfident in buying a house
right now.
They're they're so expensive,the rates are higher.
Uh a lot of them are saddledwith a lot of student loan debt.
So that's that's an issue.
(06:46):
Um so so that's tough.
Um that was probably about 50%of our business, uh, if you
will, uh four or five years ago.
And for the last 20 years it hasbeen.
Um we just if we depended onfirst-time homebuyers right now,
we wouldn't be in businessbecause you know, right now we
(07:07):
have to depend on move up buyersor you know, that kind of thing.
Maybe people buying second homesor or whatever the case is, but
first-time homebuyers have beenpretty much locked out of this
market due to affordability.
Now, I'd love to have thoseconversations with first-time
homebuyers and say, hey, I knowit seems like a daunting task to
(07:27):
buy right now, and it is, andI'm not, you know, diminishing
that fact, but there's ways togo about it, and there's there's
ways it can be done.
We have a lot of differentprograms out there for them, uh,
different ways to get them in ahouse.
But, you know, think about it.
When rates were two and a halfpercent, three percent, I mean,
(07:49):
you could fog a mirror and buy ahouse.
You didn't even have to have agreat job, you know, the income
didn't have to be that much.
And there's also a study outthere that shows, you know, how
much your income need medianincome needs to be uh or income
needs to be to buy a medianpriced house.
And it used to be around here,you know, 40,000, 45,000.
(08:11):
Now it's about 70,000, 75.
So, you know, have the uhincomes went up double around
here?
I don't think so.
But the requirements have goneup, you know, you gotta make
more because of the rates andthe prices.
SPEAKER_01 (08:26):
And I can speak to that because when I was in the
Washington County 101 class, itwas very interesting, highly
recommend it.
When we were at the sheriff'soffice, uh Sheriff Keith Secton
Sexton was talking about thesalary, just the average salary
for officers, and I was shocked.
And he said now they've got themup to about 55,000.
(08:50):
So see, that still doesn't hitthat number you talked about of
70.
SPEAKER_02 (08:54):
No.
So you really have to have adual income family, right?
Dual income.
Um or uh dual income, eithermeaning the wife has to work or
the husband's got to have twojobs, or somebody's gotta make
70,000, 75,000, it seems like,to buy a house.
Now, are there people makingless than that buying houses?
Absolutely.
I mean, we've got THDA loans,we've got some lower income type
(09:18):
loans uh that can work in somecases.
Um, but we're just talking aboutthe median kind of buyer here.
We're talking about the averageprice house.
So uh I just I don't want folksto go away thinking, oh, I don't
make 70, so I'm throwing in atowel, because there's ways to
do it, but we're just talkingabout the biggest segment of the
(09:38):
population here that are havingyou know some affordability
issues buying a house, andthat's why, you know, push
button get loan, like throughsome of these competitors, is
not a real um stellar plan thesedays.
You need a mortgage consultantlike we are to be able to come
(09:59):
in and sit down and have realconversations.
It's not AI, it's not pushbutton get loan, it is
strategizing, it is getting goodinformation, getting treated
like you should be treated, uhtransparent information uh that
deals with certainty.
And if you do this, we can helpyou do this.
(10:21):
And uh so it's almost uh to mewhen somebody calls in, well,
your rate's a quarter percenthigher, an eighth percent higher
if it is.
A lot of times we're the bestrate.
But you know, it's almostlaughable because we bring so
much more to the table than youknow, a push button get loan.
Uh, we don't want customers tobuy a home and be uninformed.
(10:45):
We want educated customers.
Educated people are our bestcustomers, and I don't mean
higher education like you've gota master's degree.
I mean let us educate you andcome in and knowledge is power.
Then you buy confidently.
I don't know if you've everbought anything that you're just
not sure about, and maybe Ishouldn't have done that.
(11:06):
And that's not a good feeling.
I want clients that arehigh-fiving after closing, like,
oh man, this was a good move.
I wanted to do this and I knewexactly what I was getting into,
and it was transparent, it was acertain, you know, there was
certainty to it, and it shouldbe really a good experience.
But I bet you if you did a poll,I bet three out of four times
(11:27):
it's not a good experience justbecause of the way our industry
operates, and we just refuse tooperate that way.
SPEAKER_01 (11:34):
And yeah, and I'm I'm glad you brought that up,
Steve, because it really goesback to call benchmark, home
loans, calls call you, callJonathan, get you guys can call
Lauren if you're in Knoxville.
I mean, you guys will do thehand holding and really inform
the client, uh, the familyreally in what they need to do.
(11:57):
If they will let us love that.
SPEAKER_02 (11:59):
If they can get off of what you rate, what you know,
and all that's important, and wego through all that.
But you know, the I would love aquestion sometimes, and I've
never had it.
Hey, what's gonna be, what'syour strategy?
You know, where where are weheaded here?
So um, you know, that that'sjust the kind of clients we're
looking for that are I guesswhat you'd look for in an
(12:20):
employee or a partner orwhatever.
Hey, who's coachable?
Who you know, who wants tolearn?
And so we love to educateclients and uh we want them.
I've gotten to the end of theroad with a lot of clients that
we've been very successful onthe journey.
And uh I look at them and I'mlike, well, you could about be a
loan officer now.
(12:40):
You about know as much as I do,maybe more.
And and because they they werelike sponges and they wanted to
learn and they didn't come inthinking they they knew
everything, you know.
Um because I've done this 40years, I've seen a thing or two.
Uh so you know, I'm not tryingto say I'm the smartest person
in the room, but I've seen somany scenarios and situations
(13:02):
and so many missteps.
I want to keep our clients frommaking those mistakes, which are
costly.
SPEAKER_01 (13:10):
It's because you care and you know, you're
building that legacy.
We've talked about this.
You you do a loan for someone,then you eventually they send
their children, and even nowgrandchildren, and you know,
second-time home buyers thatwere someone's children, and
that's so important, but reallyit it goes back to the key to
(13:30):
success in life.
If you fail to plan, you plan tofail.
SPEAKER_03 (13:34):
Exactly.
SPEAKER_01 (13:35):
And that's all about putting a strategy in place.
No matter what you're doing,buying a home, working the
market and sales, and and theline of work that I do, it's all
about what what's your strategy?
SPEAKER_02 (13:47):
Yeah.
Um and I'm at the I'm at thepoint in my career.
I can't I really care about justone or two things.
That's relationships and makingsure that I help you if you're a
client.
So I care about a relationship,I care about helping you.
I don't need to do your loan topay my electric bill.
I've I've saved my money well.
So I, you know, hey, Iappreciate the business and we
(14:09):
can all use the income, butwe're not, you know, we're not
desperate.
We're we're here to help you,and we're truly doing it for the
right reasons.
SPEAKER_01 (14:18):
I love that.
I love that.
So I think we've talked aboutthis a little bit, but I wanted
to dive into it because it'sabout inflation.
So how does inflation and thejobs market impact interest
rates, Steve?
SPEAKER_02 (14:31):
Yeah, that's a timely question because you know
the feds uh the when I say thefeds, the Federal Reserve Bank,
they're kind of to the pointnow.
They're realizing that backwhen, you know, we were getting
our little sugar high from theselow rates.
SPEAKER_01 (14:47):
Uh because that's what is that the mortgage
bankers prayer, God give meanother refi boom and I'll save
my money better.
SPEAKER_02 (14:54):
Promise to save my money better.
Yeah.
Yeah.
Well, so we were all on the wewere all on that sugar high,
right?
So we were loving it.
Business was great, three, fourtimes what it is now.
And but the feds have they'vereally Scott Besson, who's um
he's the treasury secretary, butum Jerome Powell, of course, is
over the Fed.
(15:15):
But Scott Bessant's come out andsaid the their that candy high
lasted too long.
They called it QE, quantitativeeasing.
So the feds would jump in, andif you can imagine you've got 10
houses for sale and you're gonnaauction them off, but you have
no buy, you you have threebuyers at the auction, right?
So there's not a lot ofcompetition.
(15:37):
Uh your houses are not gonnasell for that much, right?
Well, it's kind of the same waywith mortgage bonds.
You know, we got in that periodwhere, you know, the investors
didn't have that much of anappetite for for mortgage bonds.
So what does the Fed do?
They're they got unlimitedpockets, right?
Because they got all ourtaxpayer money.
They jump in and they say, we'regonna do quantitative easing or
(15:58):
QE, we're gonna buy all thesebonds, and so the bonds are
gonna be selling great becausewe're gonna buy them.
That's gonna create competition.
Uh, we're gonna be at thatauction, we're gonna be buying
one of your, you know, all tenof your houses, or maybe nine of
them.
So we're gonna prop up themarket, right?
Well, that's what they didduring COVID, right?
(16:19):
And after.
Well, they did it for too long.
Okay, so the sugar high lastedtoo long, rates got to an
unusually abnormally low point,and the feds just kept on and on
and on and on.
And even us in the industry werelike, Well, this ain't good.
This is gonna be one heck of ahangover, right?
SPEAKER_01 (16:39):
Yes, I remember you saying that many times.
SPEAKER_02 (16:42):
Yeah.
So, I mean, while I was likingit, I mean, you know, just like
you know, if you're out at thebar late at night and you're
having a good time about two orthree a.m., right?
SPEAKER_01 (16:52):
People keep buying free drinks.
SPEAKER_02 (16:53):
Yeah, it's all good.
And you know in the back of yourmind, oh, this this ain't gonna
be good, but boy, it sure isfun.
Uh, you know, and then you wakeup the next morning and you're
like, oh heck, what did we do?
Well, that's kind of what theFed had done, and even Scott
Bessant's come out and said itjust this week, you know.
So that lasted too long.
(17:14):
And so now, you know, we'retrying to make corrections um or
have been for the last threeyears since 2022 to get off of
that hangover, you know.
So now we're kind ofovercorrecting almost, right?
So rates should really be lower.
But to answer your question withjobs and inflation, the Fed, you
(17:36):
know, they're so nervous aboutinflation.
It's about at a target point,it's maybe a little bit high,
but and the jobs are, you know,even though the Fed say they're
the same right now as they werein September, they're not, the
market keeps softening for jobs.
And we could talk about a myriadof reasons for that, but one of
(17:56):
the things is AI.
I mean, just banks come outtoday.
I was just reading a headline.
JP Morgan Chase has put afreeze.
They've told their bank managersto keep the headcount where it's
at, don't hire people, don't,and it's all because of AI.
Goldman Sachs came out and saidessentially the same thing.
Amazon and Microsoft have toldtheir employees and their
(18:19):
managers to brace for not addingpeople.
Um, so and it's all due to AI.
So if the jobs, you know, staysoft, and we lost 36 or 37,000
jobs on the last jobs report,which is a soft report.
We're not adding jobs.
So if that stays like it is,that's really gonna impact
(18:42):
rates.
Uh it's gonna be for lowerrates.
Now, if we get some strong jobreport out of left field or
something, which I don't seehappening, that could hurt
rates.
SPEAKER_01 (18:52):
Interesting.
SPEAKER_02 (18:53):
But right now, it looks like it's gonna be soft,
which is gonna be, you know,positive for rates.
SPEAKER_01 (19:00):
So when you talk about AI, are you are you just
talking about AI replacing a lotof the jobs?
SPEAKER_02 (19:05):
Yes.
Yes.
Okay, be able to do more withless uh headcount, you know.
And uh so we're gonna sseriously, to me, see the
impacts of that.
But it's just timely that you'deven ask that question because
like I say, I just read thatarticle just an hour ago talking
about the banks putting freezesand that's you know, specific to
(19:27):
my industry, but that's it'sgotta be across other industries
too.
It's not just the bankingsector.
SPEAKER_01 (19:34):
Right, right.
Yeah.
And so you know, and I thinkyou've touched on this too, but
the rate cuts coming from theFederal Reserve over the next
six to twelve months.
Well, so with all that beingsaid, Steve, is do you see any
rate cuts?
SPEAKER_02 (19:50):
Yeah, absolutely.
Absolutely.
I think we could see four orfive rate cuts in the next 12
months.
And when they when they do therate cuts, they do them in
increments of a quarter.
So they could come out and say,you know, hey, we're gonna do 25
basis points or a quarter ratecut, or we're gonna do 50 basis
points or a half rate cut.
Um so, but I think we're gonnasee at least four or five going.
(20:13):
Now we got two more Fed meetingsthis year.
I think one's on October 29th,the other one's sometimes in
December, maybe the 10th or12th.
I can't remember.
Don't quote me on that.
But we've got two more thisyear, and we may see cuts at
both of those, but it's allgonna hinge on how the feds are
feeling about inflation, howthey feel about the jobs report.
(20:33):
And, you know, we could we canget some numbers out of left
field, and you know, oh, okay,we added 100,000 jobs last
month, but they may come back amonth later and say, oh, we got
to correct that report.
So you could see some seesawingof rates, uh, but overall, um,
they've there they will trenddown uh going into next year.
(20:56):
Now, how much will they trenddown is you know anybody's
guess, but I think on the bestcase scenario, so if you
averaged them right now, if yougot a decent credit score and
everything, you're probablyabout mid-sixes.
You know, we may end up thistime next year in the mid-fives
if we're lucky, which is apretty good rate, you know.
SPEAKER_03 (21:18):
Right.
SPEAKER_02 (21:18):
Historically, the rates, you know, on a more
30-year mortgage is about wherewe're at now.
So uh if we got in themid-fives, hey, we're lower than
average.
Um, is that a huge needle mover?
For me, no.
I mean, you know, a percent, butfor a lot of people it's a
psychological thing.
And back to that buyerconfidence, right?
It seems to be psychologicalwhen rates are under six
(21:41):
percent, our phones ring more.
You know, people are like, okay,let's let's go buy a house.
And it does make it.
I mean, you know, if you'refinancing a you know, a$300,000
house, 1%'s gonna make, youknow, maybe$100 a month
difference, you know, orwhatever, maybe a little bit
more.
I should have done thatcalculation before we got into
this podcast.
But anyway, uh is$100, shouldyou not buy a house or not with
(22:07):
that?
I don't know.
But um, it's not gonna beearth-shattering where the rates
are gonna go, and again, not inthe threes, but with luck in the
fives, in the mid-fives, and Ithink at worst case scenario,
we're gonna be in the highfives.
SPEAKER_01 (22:22):
So now the million dollar question is now a good
time to buy, or should buyerswait for lower rates?
SPEAKER_02 (22:28):
Oh, you had to ask me that, right?
SPEAKER_01 (22:30):
Um, I just feel like people just put off and put off
and they're waiting for therates to drop.
So is now a good time to buy?
SPEAKER_02 (22:38):
Yeah, the short answer, yes.
Um, it is a good time to buy.
SPEAKER_01 (22:42):
Why is that?
SPEAKER_02 (22:43):
And because houses are not going to get any cheaper
around here.
Now, if you live in Florida,huh, you know, uh Miami's
market's got 9.7 months ofinventory.
So yeah, maybe wait until ratesdrop a little bit and home
prices go down a little bit.
But uh around here in the stateswe operate, I would say I would
(23:04):
have to qualify that.
If you're in a really good,you're gonna be shocked by this
answer, but if you're in areally good rental situation
right now, like I have peoplecome and say, well, my rent's
$500 a month, but I just want toown my own house.
I'm like, well, where you live?
Well, I'm in my grandma'sthree-bedroom, two-bath house,
and I'm like, I'm pretty sureI'd stay there, you know, and
(23:25):
save up money.
Because what a lot of peopledon't realize is if you can pay
more down, you know, where youcan sometimes avoid PMI
insurance, which can add$100 to$200 a month onto your payment.
Uh you can get a little bitbetter rate if you pay more
down, it you can make it moreaffordable.
So in some cases, if you're in adecent rental situation, you
(23:48):
know, save up for a little bitand prepare to buy, right?
Now, if you're out there one ofthose, which a lot of people
are, and you're paying a couplethousand dollars, you know, two
thousand twenty two hundred amonth for rent or eighteen
hundred a month, and you caneven get into like one of our
zero-down USDA programs that'syou know, and you might could do
(24:08):
it for sixteen, seventeenhundred a month, yeah, I would
buy.
Now, if you're somebody that'sjust looking to buy investment
property to rent, uh I don'tknow, I don't think I'd buy
right now.
You know, if I didn't have tohave a house.
Um, but uh a second home, eh, ifyou got plenty of money, deep
(24:29):
pockets.
Most people buying second homesare you know not worried about
paying their utilities, youknow, they're they got a little
bit more savings, that'sprobably a good time to buy.
It's probably not gonna go down.
But uh so it really depends onthat's not a short answer, even
though, you know, it just reallydepends on your situation.
And that's the kind ofconversation we like to have.
(24:52):
And that's our part of ourstrategy.
SPEAKER_01 (24:53):
Yeah, and it depends on the type of house you're
looking for, what type ofmarket, neighborhood.
And here in Washington County, Imean, people continue to move in
daily.
I mean, we are sure definitelyum population is growing here.
So the elephant in the room formany in business right now is
(25:14):
the government shutdown.
So how many days are we intothis shutdown?
SPEAKER_02 (25:20):
Oh goodness.
Uh a couple days ago we were init 14 days.
I think we're on day 17.
So, like I mentioned before,it's not a you know, a day or
two and then we're back.
So, so yeah, we're about 17 daysinto this, so it's dragging on,
you know, really more than wethought.
SPEAKER_01 (25:37):
So, how's this affecting um specifically
affecting the mortgage industry?
SPEAKER_02 (25:42):
Yeah, so uh it depends on what state you're in.
You know, Florida, you and Italked about this a little bit
the other day, you know, thegovernment flood insurance
program program, FEMA, uh, theycan't write policies.
So they can't close loans thatneed flood insurance uh unless
they're buying it through aprivate, you know, privately,
(26:03):
which is more expensive a lot oftimes.
So uh so that's really affectingall types of loans down there.
Um I haven't specifically spoketo anybody in that market, but
I've read articles and it soundslike a nightmare.
I would like to, you know, talkto somebody on the ground there.
Uh for us here, you know,Tennessee and the surrounding
(26:24):
states, you know, we have uhUSDA loans, you know, that you
have to do, and you know, thosecan get a little tricky because
they're operating with less of astaff, um, you know, FHA to get
those loans insured.
Um fortunately, we're stillclosing all those types of
(26:45):
loans, VA loans, because we can,as a mortgage banker, we can
close those and still fund themand wait to get them insured by
when I say insured, that not thehouse insured, but the loan.
So it hasn't affected us toomuch yet, but the longer it
drags on, it's not good for foranybody.
(27:05):
And uh not just the mortgageindustry, you know.
You got the air trafficcontrollers, I think their last
paycheck was yesterday, and theyonly got 70% of their pay.
So, how would you like to go towork and just get 70% of your
pay?
Well, what scares me about that,and I know this was not the
question, but I just want tokind of bleed over into another
(27:27):
industry here, but like for theair traffic controllers, I mean
they could just walk out, right?
Because they're not getting paidafter yesterday.
The way I understand it.
We're coming up on the holidayseason, right?
Americans we like to travel.
We do, right?
SPEAKER_03 (27:42):
We do.
SPEAKER_02 (27:42):
And so that could be like the bombshell of the whole
shutdown, because you know,whether you're on the left or
you're on the right, you'regonna be mad at your, you know,
politician if they don't getthis thing open because when
Americans can't travel, theywould probably get a little bit
testy, especially this time ofthe year.
(28:05):
You know?
So I see the government shutdowncoming to an end within the next
few weeks just because of that.
SPEAKER_01 (28:13):
Yeah.
SPEAKER_02 (28:14):
That one simple reason.
So uh and hopefully it don't dotoo much damage to us in the
mortgage industry before thathappens.
And I just pray for the peopleand you know, our mortgage
friends in Florida and peoplebuying houses down there that
you know it comes to an endquick.
SPEAKER_01 (28:29):
Absolutely.
So what's your outlook umoverall for the housing market
for 2026?
Because it's almost I mean, 2025is coming to a close and we're
upon 2026.
So what is that outlook, Steve?
SPEAKER_02 (28:43):
Yeah, I I'm a little bit more optimistic for 2026
than I was uh in 2024, thinkingabout 25.
So um so yeah, I'm I'm morepositive for but but it's really
for reasons that are notemotional.
It's really for more metrics andstudying the market and looking
at um, you know, the the jobsthing is gonna drive rates,
(29:08):
inflation, like we said, andthat's gonna all be um, you
know, that can affect in anegative way too.
I mean, you know, if job marketsdown, nobody can buy or people
that don't have jobs can't buyhouses, obviously, but it does
help rates and it helpsaffordability.
And so I see affordability, thatindex getting better in 26, you
(29:32):
know, get those rates in themid-fives.
Uh, I think we're gonna havemore inventory on houses, so
we're not gonna see such pricejumps.
I don't think we're gonna seeany declines around here.
Um, so I do I'm cautiouslyoptimistic for 26.
I think we're gonna be um Ithink we're gonna be looking a
little bit better, a little bitthe I think the market's gonna
(29:54):
get its footing in 26, and Isure hope so because I feel like
I've been in a heavyweight fightfor the last Two years in this
industry, and uh we're justlooking for uh brighter days
ahead, and I think we will havethem, and uh, and it's still a
great time to buy.
It's it's you know, we want tohave those conversations.
We want to be honest withpeople, and a lot of people,
(30:15):
believe it or not, I tell them,don't buy a house right now,
you're not ready.
You know, you're gonna be betteroff to wait.
Now, a lot of people I I say,no, you should have bought one
last year.
You know, it's like the oldsaying, when's the best time to
plant a tree?
You know, well, 20 years ago wasthe best time, the second best
time's today.
SPEAKER_01 (30:33):
Today.
Right.
SPEAKER_02 (30:35):
So that's kind of where I'm at with the with the
outlook.
SPEAKER_01 (30:38):
Yeah.
Well, thank you, Steve, for thatupdate and for being on today
and just giving us that just amore of a positive outlook for
2026 for more the mortgageindustry.
SPEAKER_02 (30:50):
Absolutely.
Maybe you'll invite me back.
Maybe we can even get Jonathanback here in the future podcast.
SPEAKER_01 (30:56):
Yes, that'll be fun.
Thanks, Steve.
SPEAKER_00 (31:01):
This has been Benchmark Happenings, brought to
you by Jonathan Tipton and SteveReed from Benchmark Home Loans.
Jonathan and Steve areresidential mortgage lenders.
They do home loans in NortheastTennessee, and they're not only
licensed in Tennessee.
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