November 3, 2025 • 13 mins
We unpack why rates rose right after the Fed cut, where they may settle, and how affordability will shift as more housing funds move from DC to the states. We compare Minnesota, Arizona, and Florida to show when renting loses to buying and what 2026 policy could change.
Reach out to Nikki because she can run those numbers and really give you a ground level understanding of which is it buying, is it renting, is it a combination, and why?
Now's The Time - no matter where you are, where you have been, or your current results - By becoming more aware and following a process, you can have whatever it is you truly desire!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:37):
All right, it's November, November 3rd, and
Nikki, as usual, is here formarket updates.
So how's it going?
SPEAKER_01 (00:45):
Good.
Good morning, everyone.
So we did get our Fed rate cutlast week that we were talking
about.
They dropped their interest rateby a quarter, which helps us out
a little bit.
Historically speaking, when froma mortgage interest rate
standpoint, a couple weeksbefore the Fed cut, we will see
mortgage interest rates start todrop and improve.
So that, you know, inanticipation for that Fed rate
(01:08):
drop.
Ironically, what happens rightafter the Fed rate drop is that
the bond market does not likeit.
So it reacts negatively andit'll bring those interest rates
right back up for a couple, twoto three days before they'll
settle back down into where theywere prior to the rate cut.
So what we saw last week onThursday, Friday, and again
today is we're seeing thoseinterest rates go up a little
bit into that low to mid-ish,six-ish range.
(01:31):
And then they'll come back downover the next week or so and be
in probably settle back downinto the high fives.
And dare I say mid-fives.
I don't want to like say thattoo much, but so we are getting
better overall from an interestrate standpoint.
The big agenda for 2026 in themortgage industry is going to be
surrounding housingaffordability.
A lot of things are happening inthe Trump administration from a
(01:52):
funding standpoint and from abudget standpoint that are going
to affect affordability goinginto 2026.
A lot of that federal programfunding for things like Section
8, other housing programs, downpayment assistance, et cetera,
is being pushed from the federalbudget down to the local or
state budget.
So it kind of got me thinkingdoing some research on, well,
(02:13):
what does that mean?
What is how can that be helpfulfor us as we move into 2026?
So what I came up with is thatthere are statistics that talk
about housing affordability.
And when we talk about housingaffordability, it is a moving
target based on a lot ofeconomic structures.
But what does a person or anindividual family need to make
in order to afford a home indifferent states?
(02:34):
So I put together someinformation on Minnesota,
Arizona, and Florida, some ofthe, you know, really more
prominent areas of where I helpservice people.
That's not to say that we can'tget the information for other
states, but talking abouthousing affordability.
So what we talk about is inorder to rent or in order to
purchase a two-bedroom home, theaffordability scale, for
(02:57):
example, in Minnesota says thata full-time worker must be
earning on average$28.23 an hourin order to afford that
two-bedroom home, according tothe statistics.
That means that without theirdebt-to-income ratio going over
30% from a housing standpointonly, they need to make$58,711
(03:18):
per year in order to afford atwo-bedroom home in the state of
Minnesota.
Now, now, mind you, in the stateof Minnesota, obviously there's
a huge metropolitan area inMinneapolis where those numbers
are actually, you know, willneed to go up.
But even in the outskirts ofMinnesota, it takes all the
entire state into consideration.
So if you have one person ortwo-person family that are
making$58,000, in theory, theycan afford a two-bedroom home.
(03:42):
So that's, you know, that's goodnews.
That seems pretty affordableconsidering pay rates, et
cetera, of what's going ontoday.
If we look at Arizona, Arizonais a little bit different of a
story because Arizona has a lotof rental renters and has a lot
of higher rents in comparison towhat the actual housing cost is.
So the housing wage in Arizonafor a two-bedroom rental is
(04:03):
$34.18 per hour.
So a family would need to makeat least$34,18 or$62,000 a year.
If they wanted to purchase atwo-bedroom home in Arizona,
they only really need to make$23.44 an hour.
So there's a significantdifference in the state of
Arizona, particularly betweenrenting a two-bedroom and owning
(04:25):
a two-bedroom.
So it's it's really interestingto see that because Arizona is a
little bit more transient.
You have a lot of snowbirdscoming in that are, you know,
driving them rental prices up.
So in the state of Arizona, it'sdefinitely more economical to
purchase a home than it is torent a home.
So that's, you know, that's goodnews.
The good news is again, if youthink about even$34.18 an hour,
(04:46):
that's doable with two people,two-person income.
So that's, you know, that's thegood news.
So there is some still someaffordability in the state.
If we look at Florida, soFlorida's actually a little bit
even higher.
So the income needs to be around$77,522 annually to afford a
two-bedroom home from a purchasestandpoint.
(05:06):
Again, Florida's a little bitdifferent because they do have a
huge rental market, but theyalso have huge metropolitan
areas and multiple metropolitanareas.
So you can pretty much say thatthroughout the state, the 72,000
will probably get you there inmost of the state, minus some of
the more prestigious areas.
And so basically, the messagehere is that there is still some
affordability measure when itcomes to being able to purchase
(05:29):
a home versus renting a home aswe move into 2026.
With the programs that areavailable, you know, for down
payment assistance, things ofthat nature, it can really help
out with that affordabilitymeasure.
Also, one important thing thatthe Trump administration is
trying to push down is aderegulation on some federal
funds that go towards buildingnew homes.
(05:49):
And if that happens, what thatdoes is it opens up more
flexibility and more money andmore dollars to be pushed down
to builders to as incentives tokeep building homes at lower
costs so that they go, they getpassed down to the consumer at a
lower cost, making them moreaffordable.
So if that agenda does getpushed, and I'm not sure, you
know, like if they're saying,oh, it's a huge, you know,
(06:10):
agenda for us to make sure ithappens, but it definitely is in
a bill with Congress right nowto deregulate that section of
funds so that they can be pushedmore easily down to the state,
more easily down to the buildersto be able to make to build
homes, you know, moreeconomically so that that cost
doesn't need to be passed on tothe consumer.
SPEAKER_00 (06:28):
Yeah, I was gonna ask timing.
So yeah, it looks like it's it'son the floor now.
So we'll see how we gotta getthe government back open in
order to pass on.
SPEAKER_01 (06:36):
So yeah.
So moving into 2026, so that isreally the concentration of the
administration as it pertains tohousing.
One other thing I wanted tomention.
They also looked at the Trumpadministration, has also looked
at all the programs that arefederally funded right now for
housing affordability and lookedat which ones are actually
helping people and which onesare just kind of like sitting
(06:57):
out there getting funded and notreally doing much from that
standpoint.
And there's they've done aconsolidated effort as well on
this bill, as well as saying,let's remove this program, this
program, and this program, whicharen't really actually doing
anything.
And it's to the tune of about$22million that they want to move
over to other parts of HUD,other parts of housing and urban
urban development, so that theycan again bring the funds down
(07:21):
to that state level to bedispersed out to get those homes
more affordable for everyoneinvolved.
So we're really hopeful that,you know, this push will work
and that, you know, we'll beable to get the funding down to
where it needs to go in order tohelp increase that affordability
in 2026.
SPEAKER_00 (07:36):
So just for the agents that are tuning in, or
even I know that generalpopulation just wants to
understand and know theseupdates and are listening,
either, you know, whicheverplatform they're on, to a
mortgage standpoint or as anagent, when they're pushing
those funds down to a statelevel, like what does that mean
(07:58):
for us as agents that arehelping buyers?
Or in your perception, is that agood thing?
Is it not so good and why?
SPEAKER_01 (08:07):
That's a great question.
So a lot of times when you havefederal monies that are coming
down to the state, the statethen decides what to do with
those, whether they put those,you know, towards Section 8
housing or whether they putthose towards more down payment
assistance availability from astate level to potential buyers,
most of these funds that aregoing to be pushed down are
really gonna go towards thebuilders to allow them to build
(08:27):
homes or to have federalsubsidies in order to build
these homes.
So, in other words, a home thatmight cost a builder, let's say,
$300,000 to build with thefederal help, they don't have to
pass that cost on to theconsumer.
Making a$300,000 bill cost theconsumer$400,000.
The$300,000 bill maybe cost theconsumer then$350,000.
So that's the idea behind it.
(08:49):
And obviously those numbers arejust examples.
But the idea is that theyencourage builders with
incentives to build more homes,which is going to increase the
supply, which is a help going tosatisfy the demand.
Now, is it going to happen in ayear?
Absolutely not.
But if we can get it to progressforward and get it to move and
move the needle at least alittle bit, that should help
(09:10):
with the the price of the homeremaining stable or going up
slightly, whereas before we're,you know, we were planning on it
increasing quite significantly.
Yep.
SPEAKER_00 (09:19):
Absolutely.
Wonderful.
Thank you.
I just wanted to definitely havethat clarification.
And again, another timeline.
So as to think what's happeningnow, how how and when will that
affect us and impact us forsure?
Yes.
And is there anything?
Because I know, you know, withthe government going into what
is this day 33, 34 of theshutdown, you know, from a real
(09:43):
estate standpoint or an agentstandpoint, is there anything
that we should know, or from amortgage standpoint into real
estate?
Like what does that mean foryou?
Or what are you seeing orlooking forward to or
anticipating?
Yeah.
SPEAKER_01 (09:57):
So with this, really it's just business as usual from
a mortgage standpoint.
From Fannie Mae, they're stillfully operational.
Everything's running as itshould.
The only program that ispotentially affected is the USDA
or rural development program.
That has to be opened back up inorder for those funds to be
secured.
But I haven't, you know, theamount of USDA loans that, you
know, are done are not all thatmany.
(10:19):
But yes, that program isaffected right now with the
shutdown because they can't getfunds out to fund those loans or
the subsidy on those loans.
So that's the only thing thatreally is being affected at this
time.
Otherwise, it is just businessas usual.
Interest rates are responding asthey should be, you know, just
to the market and not to theshutdown, which is really nice
too.
SPEAKER_00 (10:38):
Perfect.
Good.
I just wanted to put that outthere because I know a lot of
people are tuning in, are justwondering.
And yeah, from my standpoint, Ithink I've done a couple USDA
loans in my, but I'm in theMinneapolis more, you know, so
metro area.
So yeah, and if that isimpacting some of the agents
listening, should they bereaching out to you or what can
(11:01):
be reaching out to me?
SPEAKER_01 (11:03):
We'll find alternative programs.
If we can't find alternativeprograms, we'll, you know, get a
we'll try to get a timeline asto when those funds can be
guaranteed and put back onthere, etc.
So we're hoping that you knowthe shutdown will end soon, as
everyone is.
But until that time, we just,you know, we just, like I said,
business as usual.
Perfect.
SPEAKER_00 (11:19):
Good to hear.
Good.
Yes, wonderful.
Well, this is all really goodinformation.
I will definitely re-watchagain.
I I love how rents and snowbirdsand the for housing
affordability, renting versusbuying, it varies from state to
state based upon that.
And I think that that'soverlooked quite often.
(11:40):
So I'm so glad and grateful thatyou highlighted that today.
So if you have questions aboutyour state or places that you're
working with investors orrenters or whatever that looks
like, reach out to Nikki becauseshe can run those numbers and
really give you a ground levelunderstanding of which is it
(12:01):
buying, is it renting, is it acombination, and why?
So that again, you can beeducated, you can go to your
potential clients or pastclients or prospects, and you
can give them the actualinformation, correct information
backed by numbers andunderstand.
So I'll I'll leave with my kindof word of the week as we are
(12:23):
considered the experts.
We do hold the license.
So coming to calls like this orlistening and finding the
information to better, you know,fill your tool belt up with
tools and resources andunderstanding and knowledge and
up-to-the-date information isyour job as an agent.
And having people like Nikki inyour corner, it makes my job a
(12:46):
lot easier.
So if you don't have that, uhdefinitely reach out to Nikki.
She's a wealth of knowledge, andshe's so generous with her time
and information and knowledge.
And that's definitely power forme and for you.
So again, appreciate you and allyou do and continuing to show up
here.
Absolutely.
Wonderful.
(13:07):
Yes, as well.
You too, and we'll see you nextweek.
All right, bye.
Bye.
All right, it's November, November 3rd, and
Nikki, as usual, is here formarket updates.
So how's it going?
SPEAKER_01 (00:45):
Good.
Good morning, everyone.
So we did get our Fed rate cutlast week that we were talking
about.
They dropped their interest rateby a quarter, which helps us out
a little bit.
Historically speaking, when froma mortgage interest rate
standpoint, a couple weeksbefore the Fed cut, we will see
mortgage interest rates start todrop and improve.
So that, you know, inanticipation for that Fed rate
(01:08):
drop.
Ironically, what happens rightafter the Fed rate drop is that
the bond market does not likeit.
So it reacts negatively andit'll bring those interest rates
right back up for a couple, twoto three days before they'll
settle back down into where theywere prior to the rate cut.
So what we saw last week onThursday, Friday, and again
today is we're seeing thoseinterest rates go up a little
bit into that low to mid-ish,six-ish range.
(01:31):
And then they'll come back downover the next week or so and be
in probably settle back downinto the high fives.
And dare I say mid-fives.
I don't want to like say thattoo much, but so we are getting
better overall from an interestrate standpoint.
The big agenda for 2026 in themortgage industry is going to be
surrounding housingaffordability.
A lot of things are happening inthe Trump administration from a
(01:52):
funding standpoint and from abudget standpoint that are going
to affect affordability goinginto 2026.
A lot of that federal programfunding for things like Section
8, other housing programs, downpayment assistance, et cetera,
is being pushed from the federalbudget down to the local or
state budget.
So it kind of got me thinkingdoing some research on, well,
(02:13):
what does that mean?
What is how can that be helpfulfor us as we move into 2026?
So what I came up with is thatthere are statistics that talk
about housing affordability.
And when we talk about housingaffordability, it is a moving
target based on a lot ofeconomic structures.
But what does a person or anindividual family need to make
in order to afford a home indifferent states?
(02:34):
So I put together someinformation on Minnesota,
Arizona, and Florida, some ofthe, you know, really more
prominent areas of where I helpservice people.
That's not to say that we can'tget the information for other
states, but talking abouthousing affordability.
So what we talk about is inorder to rent or in order to
purchase a two-bedroom home, theaffordability scale, for
(02:57):
example, in Minnesota says thata full-time worker must be
earning on average$28.23 an hourin order to afford that
two-bedroom home, according tothe statistics.
That means that without theirdebt-to-income ratio going over
30% from a housing standpointonly, they need to make$58,711
(03:18):
per year in order to afford atwo-bedroom home in the state of
Minnesota.
Now, now, mind you, in the stateof Minnesota, obviously there's
a huge metropolitan area inMinneapolis where those numbers
are actually, you know, willneed to go up.
But even in the outskirts ofMinnesota, it takes all the
entire state into consideration.
So if you have one person ortwo-person family that are
making$58,000, in theory, theycan afford a two-bedroom home.
(03:42):
So that's, you know, that's goodnews.
That seems pretty affordableconsidering pay rates, et
cetera, of what's going ontoday.
If we look at Arizona, Arizonais a little bit different of a
story because Arizona has a lotof rental renters and has a lot
of higher rents in comparison towhat the actual housing cost is.
So the housing wage in Arizonafor a two-bedroom rental is
(04:03):
$34.18 per hour.
So a family would need to makeat least$34,18 or$62,000 a year.
If they wanted to purchase atwo-bedroom home in Arizona,
they only really need to make$23.44 an hour.
So there's a significantdifference in the state of
Arizona, particularly betweenrenting a two-bedroom and owning
(04:25):
a two-bedroom.
So it's it's really interestingto see that because Arizona is a
little bit more transient.
You have a lot of snowbirdscoming in that are, you know,
driving them rental prices up.
So in the state of Arizona, it'sdefinitely more economical to
purchase a home than it is torent a home.
So that's, you know, that's goodnews.
The good news is again, if youthink about even$34.18 an hour,
(04:46):
that's doable with two people,two-person income.
So that's, you know, that's thegood news.
So there is some still someaffordability in the state.
If we look at Florida, soFlorida's actually a little bit
even higher.
So the income needs to be around$77,522 annually to afford a
two-bedroom home from a purchasestandpoint.
(05:06):
Again, Florida's a little bitdifferent because they do have a
huge rental market, but theyalso have huge metropolitan
areas and multiple metropolitanareas.
So you can pretty much say thatthroughout the state, the 72,000
will probably get you there inmost of the state, minus some of
the more prestigious areas.
And so basically, the messagehere is that there is still some
affordability measure when itcomes to being able to purchase
(05:29):
a home versus renting a home aswe move into 2026.
With the programs that areavailable, you know, for down
payment assistance, things ofthat nature, it can really help
out with that affordabilitymeasure.
Also, one important thing thatthe Trump administration is
trying to push down is aderegulation on some federal
funds that go towards buildingnew homes.
(05:49):
And if that happens, what thatdoes is it opens up more
flexibility and more money andmore dollars to be pushed down
to builders to as incentives tokeep building homes at lower
costs so that they go, they getpassed down to the consumer at a
lower cost, making them moreaffordable.
So if that agenda does getpushed, and I'm not sure, you
know, like if they're saying,oh, it's a huge, you know,
(06:10):
agenda for us to make sure ithappens, but it definitely is in
a bill with Congress right nowto deregulate that section of
funds so that they can be pushedmore easily down to the state,
more easily down to the buildersto be able to make to build
homes, you know, moreeconomically so that that cost
doesn't need to be passed on tothe consumer.
SPEAKER_00 (06:28):
Yeah, I was gonna ask timing.
So yeah, it looks like it's it'son the floor now.
So we'll see how we gotta getthe government back open in
order to pass on.
SPEAKER_01 (06:36):
So yeah.
So moving into 2026, so that isreally the concentration of the
administration as it pertains tohousing.
One other thing I wanted tomention.
They also looked at the Trumpadministration, has also looked
at all the programs that arefederally funded right now for
housing affordability and lookedat which ones are actually
helping people and which onesare just kind of like sitting
(06:57):
out there getting funded and notreally doing much from that
standpoint.
And there's they've done aconsolidated effort as well on
this bill, as well as saying,let's remove this program, this
program, and this program, whicharen't really actually doing
anything.
And it's to the tune of about$22million that they want to move
over to other parts of HUD,other parts of housing and urban
urban development, so that theycan again bring the funds down
(07:21):
to that state level to bedispersed out to get those homes
more affordable for everyoneinvolved.
So we're really hopeful that,you know, this push will work
and that, you know, we'll beable to get the funding down to
where it needs to go in order tohelp increase that affordability
in 2026.
SPEAKER_00 (07:36):
So just for the agents that are tuning in, or
even I know that generalpopulation just wants to
understand and know theseupdates and are listening,
either, you know, whicheverplatform they're on, to a
mortgage standpoint or as anagent, when they're pushing
those funds down to a statelevel, like what does that mean
(07:58):
for us as agents that arehelping buyers?
Or in your perception, is that agood thing?
Is it not so good and why?
SPEAKER_01 (08:07):
That's a great question.
So a lot of times when you havefederal monies that are coming
down to the state, the statethen decides what to do with
those, whether they put those,you know, towards Section 8
housing or whether they putthose towards more down payment
assistance availability from astate level to potential buyers,
most of these funds that aregoing to be pushed down are
really gonna go towards thebuilders to allow them to build
(08:27):
homes or to have federalsubsidies in order to build
these homes.
So, in other words, a home thatmight cost a builder, let's say,
$300,000 to build with thefederal help, they don't have to
pass that cost on to theconsumer.
Making a$300,000 bill cost theconsumer$400,000.
The$300,000 bill maybe cost theconsumer then$350,000.
So that's the idea behind it.
(08:49):
And obviously those numbers arejust examples.
But the idea is that theyencourage builders with
incentives to build more homes,which is going to increase the
supply, which is a help going tosatisfy the demand.
Now, is it going to happen in ayear?
Absolutely not.
But if we can get it to progressforward and get it to move and
move the needle at least alittle bit, that should help
(09:10):
with the the price of the homeremaining stable or going up
slightly, whereas before we're,you know, we were planning on it
increasing quite significantly.
Yep.
SPEAKER_00 (09:19):
Absolutely.
Wonderful.
Thank you.
I just wanted to definitely havethat clarification.
And again, another timeline.
So as to think what's happeningnow, how how and when will that
affect us and impact us forsure?
Yes.
And is there anything?
Because I know, you know, withthe government going into what
is this day 33, 34 of theshutdown, you know, from a real
(09:43):
estate standpoint or an agentstandpoint, is there anything
that we should know, or from amortgage standpoint into real
estate?
Like what does that mean foryou?
Or what are you seeing orlooking forward to or
anticipating?
Yeah.
SPEAKER_01 (09:57):
So with this, really it's just business as usual from
a mortgage standpoint.
From Fannie Mae, they're stillfully operational.
Everything's running as itshould.
The only program that ispotentially affected is the USDA
or rural development program.
That has to be opened back up inorder for those funds to be
secured.
But I haven't, you know, theamount of USDA loans that, you
know, are done are not all thatmany.
(10:19):
But yes, that program isaffected right now with the
shutdown because they can't getfunds out to fund those loans or
the subsidy on those loans.
So that's the only thing thatreally is being affected at this
time.
Otherwise, it is just businessas usual.
Interest rates are responding asthey should be, you know, just
to the market and not to theshutdown, which is really nice
too.
SPEAKER_00 (10:38):
Perfect.
Good.
I just wanted to put that outthere because I know a lot of
people are tuning in, are justwondering.
And yeah, from my standpoint, Ithink I've done a couple USDA
loans in my, but I'm in theMinneapolis more, you know, so
metro area.
So yeah, and if that isimpacting some of the agents
listening, should they bereaching out to you or what can
(11:01):
be reaching out to me?
SPEAKER_01 (11:03):
We'll find alternative programs.
If we can't find alternativeprograms, we'll, you know, get a
we'll try to get a timeline asto when those funds can be
guaranteed and put back onthere, etc.
So we're hoping that you knowthe shutdown will end soon, as
everyone is.
But until that time, we just,you know, we just, like I said,
business as usual.
Perfect.
SPEAKER_00 (11:19):
Good to hear.
Good.
Yes, wonderful.
Well, this is all really goodinformation.
I will definitely re-watchagain.
I I love how rents and snowbirdsand the for housing
affordability, renting versusbuying, it varies from state to
state based upon that.
And I think that that'soverlooked quite often.
(11:40):
So I'm so glad and grateful thatyou highlighted that today.
So if you have questions aboutyour state or places that you're
working with investors orrenters or whatever that looks
like, reach out to Nikki becauseshe can run those numbers and
really give you a ground levelunderstanding of which is it
(12:01):
buying, is it renting, is it acombination, and why?
So that again, you can beeducated, you can go to your
potential clients or pastclients or prospects, and you
can give them the actualinformation, correct information
backed by numbers andunderstand.
So I'll I'll leave with my kindof word of the week as we are
(12:23):
considered the experts.
We do hold the license.
So coming to calls like this orlistening and finding the
information to better, you know,fill your tool belt up with
tools and resources andunderstanding and knowledge and
up-to-the-date information isyour job as an agent.
And having people like Nikki inyour corner, it makes my job a
(12:46):
lot easier.
So if you don't have that, uhdefinitely reach out to Nikki.
She's a wealth of knowledge, andshe's so generous with her time
and information and knowledge.
And that's definitely power forme and for you.
So again, appreciate you and allyou do and continuing to show up
here.
Absolutely.
Wonderful.
(13:07):
Yes, as well.
You too, and we'll see you nextweek.
All right, bye.
Bye.
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