2026 Mortgage Forecast: Rates, Inventory & the Lock-In Effect Breaking Open

Mike Hambright (00:00.878)
Hey everybody, welcome back to the show. Today I’m here with my buddy Justin Humphries. We’re gonna be talking about kind of state of the union of what’s going on in the mortgage world. He’s a mortgage lender, he’s also a member of Investor Fuel. And he’s gonna tell us a lot about what’s going on in the world right now, what he’s seeing, and maybe get out his crystal ball towards the end here. So Justin, great to see you buddy.

Justin (00:18.498)
Yeah, good to see you, Mike. Much appreciated. Thanks for having me on.

Mike Hambright (00:21.324)
Yeah, excited to talk about this and catch up with you a little bit. Before we jump into the show today, tell us a little about your backstory.

Justin (00:28.12)
Yeah, so a little backstory. I’ll start professional and I’ll go personal too. So mortgage lender, do residential. So that’s going to be a lot of conventional FHA VA, but I’m also really having the investor space in DSCR. That’s something I’m familiar with and I don’t originate fix and flips, but I’d make a ton of referrals out for those. So that’s kind of what I do in my personal life. Five years of experience in that, pretty much the only thing I’ve ever done. And I really enjoy that piece of it.

enjoy helping home buyers and investors grow wealth through real estate. So as far as personally, I’m out of the Nashville market. It’s a wonderful market to be in, originate multiple states. So I’ve got a pulse on not just Nashville, but especially the Atlanta market, a little bit of the Cleveland, Ohio market and parts of Florida as well. So I’m seeing a little bit of the differences across the country there. And then I’m married and I’ve got three kids under five years old. So home life is nuts, but we’re very blessed and yes, it’s very hectic.

Mike Hambright (01:24.728)
Hectic.

Justin (01:27.49)
Yeah.

Mike Hambright (01:27.788)
Yeah, yeah. Well, tell us a little bit about, so you were just talking about, you know, I think a lot of times when you see stuff on major news networks or whatever, they talk about America as a whole, right? And we kind of know anything in real estate and I guess anything in mortgages is, it’s not one size fits all. things are happening very differently across the country. So talk a little bit about what you’re seeing just regionally or kind of state by state or a little bit of what kind of bifurcation you’re seeing, I guess.

Justin (01:56.792)
Yeah, that’s a great question. So, I mean, we’re seeing a lot of differences, especially when it comes to inventory on market, regionally across the US, the Northeast and Midwest largely are below pre-pandemic inventory levels. So, I mean, we’ve actually seen tightening of the market there in terms of price points, price points going up a little bit quicker, more appreciation, things you would expect to see when you see less listings on market. Now the flip side of that, the COVID boom markets that we kind of saw, so your Austin’s, Tampa,

you know, my home market a little bit in Nashville too, they’re running 30 to 35 % of pre pandemic listings on market. So here in these types of markets, you’re seeing more time on market, more seller concessions and kind of a, you know, downward pricing pressure on those listings. We’ll see what kind of happens here. We’ll get maybe in the interest rates a little bit later and see if maybe that takes some of those listings on them or off the market. But for now, I think Nashville last I saw is about 30.

Tennessee is a whole about 34 % above pre pandemic inventory levels, which is.

Mike Hambright (02:57.324)
Yeah, that’s interesting. Is that because those markets that you mentioned there are probably building at a much faster rate? Like the Northeast, I guess I presuppose that there’s not as much building activity going on there as there is in Dallas, for example.

Justin (03:08.92)
Yeah, so I know like Dallas, Nashville have had a lot of COVID era building activity that has now finally made it to market and some of it’s even getting relisted, right? So as you well know, Mike, I mean, lead time on from when somebody decides to break ground to when they’re delivering, you know, 100, 100 houses in the subdivision is a couple of years. So, you know, we’ve seen all that inventory that people planned on building in 20 to 23 come to market, be on market and start to sit on market now.

Mike Hambright (03:28.216)
Right.

Justin (03:37.538)
But now we’re kind of seeing the opposite, right? Builders are really starting to pull back in these Sunbelt markets, really.

Mike Hambright (03:43.948)
Yeah, yeah. So let’s talk about a little bit about I think there was this factor of people not wanting to let go of cheap mortgages. So a lot of people that had, you know, a 3 % interest rate or just were not willing to sell because I mean, the way that I said it is the real asset is the mortgage and not the not the house for some period of time. But I think there’s also people that like they need to sell or I think people are probably become a little bit more willing to sell. Maybe it’s to unlock equity. Maybe it’s because

Since they bought that 3 % mortgage. There’s some there’s somebody like you that has like a Fast-growing family and they’re like we just can’t like I like that rate But this house doesn’t work anymore. It could be the other way like hey all our kids are out of the house now What are we doing in this huge house by ourselves or so? Like what do you what are you seeing ever people’s kind of willingness to give up on that cheap mortgage?

Justin (04:22.039)
Yeah.

Justin (04:33.912)
Yeah, so I think we’re seeing that willingness increase, right? What you’re talking about is what a lot of people have termed the rate lock effect. The impact of somebody having a 3 % or sub 3 % mortgage on their willingness to trade up into a 6%, 7%, 8 % loan like we saw in 2023. The sharpness of the increase in rates from spring of 2022, really January 22 through October 2023 rates went.

excuse me, rates went from 3 % up to 8 % in, what is that, like, you know, 20 months, right? I mean, that’s insane, 22 months. that’s a, less than that. That is a really, really sharp increase and rates did peak at 8 % in October, 2023. So we’ve seen some of that decline now to where, you know, good conventional rate is going to sit around 6 % and your government loans are in the mid fives. So.

That’s a meaningful difference and that side of it’s ease the rate lock effect. But I think you’re right on where people just started to make the decision of, hey, if they can, and not everybody can afford to in this market with the home prices where they’re at and rates still elevated above where their current rate is. But if they can, if they need to, if they have, they bought a house in 2020 and they had no kids and now they’ve got two or three or four and they’re bursting at the seams of that house, we’re seeing move up buyers come back into the market and trying to capture

not only the price gains, but put larger down payments up on move up houses. And they’re less dissuaded by rates being at 6 % now as we’ve of gotten used to it. I think we’re starting to stabilize in terms of buyer expectations for monthly payments. I have a lot of conversations with investors and home buyers. And I think up until this past year to two years, when I’d ask, hey, what do you expect your monthly payment to be? Right?

which is a key question because you want to make sure that you’re really moderating those expectations early on as opposed to, we’re under contract on a house. We’re going to buy this. And then that mortgage lender calls you and says, well, hey, that mortgage payment is 3000 when you were expecting 2200. Right now the deal falls apart. in the middle of it. So I’d rather kind of pop the bubble early. What I’m finding those pop the bubble conversations is people’s expectations are a lot more aligned now with reality than they were.

Mike Hambright (06:39.288)
Yeah.

Justin (06:53.464)
even a year and a half, two years ago. So I think we’re starting to see the market get used to where things are at and just understand that, you know, home prices may not be affordable and interest rates may not be low, you know, they can make some of this fit in their monthly budget. Home prices haven’t exploded since 2021, 2022 market. They’ve really moderated in some parts of the country, you know, been really flat. I don’t think anybody’s had a, you know, decline over.

Mike Hambright (06:55.245)
Mm-hmm.

Justin (07:20.504)
a four year time period. We’ve certainly seen a couple of markets that year over year down a couple of percentage points, but nothing ridiculous, but also incomes are catching up and everything else is getting more expensive while housing and mortgages are staying the same and rates have declined 2 % since October, 2023. So all of that has played into not an elimination of that rate lock effect, but really an easing of that to where there’s a lot more willingness now to accept that higher rate if they need to move, right? Or to get into the first house as well.

Mike Hambright (07:50.924)
Yeah, I think, you

tell me if you’re seeing this too. happen to know somebody, and I gotta believe this is common, is people that their interest rate is really affordable, but the housing has just, especially people that are on a fixed rate, like I happen to know somebody, that like they just couldn’t afford their house anymore because taxes and insurance have gone up so much. just like literally that made it unaffordable even though they had a rate locked in and then they just kind of decided like, hey, this is too big of a house for me anyway. I’m just gonna kind of downsize, but I’m gonna try to also reduce the cost of insurance.

Justin (08:14.794)
something like that. It’s too big of a house for me anyway.

Mike Hambright (08:22.638)
access.

Justin (08:23.446)
Yeah. I mean, you’ve seen a lot of that in the states that have been rocked over insurance costs the last four or five years. So, you know, know your market Dallas, Texas is one where taxes have gone up, you know, quite a bit, right? Florida is another one. Insurance has gone up in Texas as well. believe Florida being coastal Louisiana, even Georgia is one of my big sub markets. Insurance there has exploded. Right. So

Mike Hambright (08:34.967)
Yeah, taxes are high here.

Mike Hambright (08:47.928)
Mm-hmm.

Justin (08:48.92)
I’ve started to have to adjust what I estimate for homeowners insurance when I’m running numbers for home buyers and investors. So in anything coastal really has gotten a lot more expensive on the insurance side and a lot of taxes have exploded. And again, for existing home buyers, that does help ease that rate lock effect too, because they’re more willing to list out of necessity, right? Because they would like to either kind of downsize or go back even to renting a home.

as opposed to with a bunch of cash in their pocket from the sale, right? As opposed to, you know, kind of stand a $10,000 a year tax bill, for example, in Texas, which is kind of one of those markets where taxes are pretty high along with high property insurance in Florida as well. So I think you’ve seen a lot of that and a lot of homeowners in certain markets that own their house frankly or that have started dangerously on my dad to just opt out of homeowners insurance and like, if I’m in Miami,

in a certain coastal floodplain, insurance is gonna be $30,000. If I lose the house, if the hurricane wipes it out, it wipes it out. I can’t pay the 30 grand. So you’re starting to see pockets in Florida, pockets in Louisiana too, that are almost uninsurable. And again, it’s very distinct pockets. By no means do I mean suggested to see the entire state of Florida or the entire state of Louisiana.

Mike Hambright (10:10.67)
Right.

Justin (10:13.43)
With now, I think it’s 60 to 70 % of homeowners in Florida being on citizens, which is a state’s insurer of last resort. I mean, it’s crazy. And then they charge assessments if they have big loss years, they’ll charge one-time assessments to the homeowners. So yeah, I mean, it’s definitely a challenge in those markets, absolutely, right?

Mike Hambright (10:33.186)
Yeah, yeah. So I know that.

the media plays a huge role in expectations at least. They actually are not determining anything. They’re talking head to kind of persuade people one way or the other, I guess. But there’s obviously been a lot of talk about inflation decreasing. I think a lot of people assume that means deflation. like prices are going down. It’s like, no, just the rate of inflation is going down. They never clarify that. I I know that, but I think the average person thinks otherwise. But let’s just talk about that role of

kind of easing inflation or at least the rate of inflation and maybe what that’s having on the mortgage market and I guess the retail resale market.

Justin (11:14.776)
Yeah. So I mean, as a whole, we’ve seen kind of declining rates. I mentioned it a couple of times. I’ll throw it in there again, because it’s, it’s important to note. I get questions all day, when are rates going to drop? And my answer is the same. They have, right? May they drop more? Absolutely. But they’re down, you know, 2 % or so from peaks in October, 2023, when they were at, you know, an average of 7.92 % or above eight, depending on the index that you look at. So they dropped from eight to six.

2 % is substantial drop and that’s really been due to easing inflation, is one variable there. The second variable is tightening spreads in between mortgage backed securities and mortgage bonds in the 10 year treasury. And I can dive into that a little bit. I know when we start talking capital markets, it can make people fall asleep and their ears start bleeding out because they get bored. But I’m interested in it and it certainly plays a role in a lot of the rate decreases we’ve been seeing have been ultimately because of those two things.

Mike Hambright (12:02.648)
Hahaha

Justin (12:13.56)
when that inflation rate, like you were talking about, peaked what, 9. something percent in 2023, 2022, 2023, you know, and rates had a lag of how they responded to that. We started to see this in 21. We started to know, OK, well, inflation is coming up, inflation is coming up. in early 2022, and mortgage rates stuck at, you know, 2.8, 2.9, 3.25, that low range where

you know, somebody would have complained about a three and a quarter mortgage rate in 21. And now, you know, that would be, we’d all be insanely happy if they were there now. But we had a lag there in terms of the data actually moving mortgage rates. And then once mortgage rates caught up, up that it may be, and ultimately the bond investors caught up that maybe the transitory inflation that the Fed was talking about, that Jerome Powell discussed was not as transitory as we thought it was. That was a little bit more,

Mike Hambright (12:47.894)
Right.

Justin (13:10.7)
little bit more than a quarter or six months that we were gonna see this inflation. But like you said, that’s the issue with inflation is it compounds upon itself, right? So inflation, the rate of inflation has sort of stabilized at 2.7, 2.9%. High twos, we’d love to see it. The Fed would love to see it around 2%, but that’s much better than 9%, right? Now that 2.9, let’s call it three all round up, that 3 % inflation,

Mike Hambright (13:31.905)
Right.

Justin (13:38.264)
is on top of all the inflation we already got in 2021, 22, 23, 24, et cetera. So it’s still compounding, right? It’s like if you have a $100,000 house that appreciated 3%, that’s a $3,000 appreciation rate. Or if you have a $400,000 house appreciated 3%, that’s 12 grand, right? Same 3%, but you’re starting from a different cost basis. And so that’s what we’re seeing in the market with

Mike Hambright (13:58.659)
Mm-hmm.

Mike Hambright (14:02.093)
Right.

Justin (14:05.918)
easing inflation or the easing rate of inflation, know, it’s still, prices are still high. And I think that’s the message from consumers is, I thought inflation was going down, the rate of inflation is, but prices are still going up. They’re just going up some more.

Mike Hambright (14:20.13)
Right. Yeah, yeah. What’s going on? Give us the low down from a default standpoint of foreclosure activity. Like I think there’s a lot of misconceptions about what’s going on there. From my standpoint, it seems like a lot of people have a lot of equity in their house. So I think like when I started in 2008, when there was a lot of foreclosure activity, like a lot of people didn’t have any equity. That’s really what was driving the foreclosure. But it seems like they have room to kind of work things out now. But give us the down low.

Justin (14:46.678)
Yeah, so mortgage defaults, a lot of these loans right now, especially your conventional loans, were very tightly underwritten when they were originated. And especially refinances, those are people that have high equity, low rates, low payments, probably really well qualified. we’re seeing almost, I mean, I won’t say almost none, but the default rate of a conventional or government mortgage or like a VA USDA loan is going to be pretty low across the board because of a lot of what you just mentioned.

We are seeing defaults tick up on FHA loans, right? So, and keep in mind the default rate on FHA is always gonna be higher than the default rate on conventional because those are your more credit, not necessarily risky borrowers, but maybe not as credit worthy, right? You can get approved and have a 590 credit score and put 3 1⁄2 % down on the house, right? You’re have maybe not the greatest rate, but it is possible, okay? Those loans are still underwritten pretty tightly, but they are willing to go up to a higher

Mike Hambright (15:35.372)
Mm-hmm.

Justin (15:44.62)
debt to income ratio, cetera. So we’re seeing, I think, more defaults there and it’s ticking up. I wouldn’t say it’s at a level that’s high or unsustainable, but it is something to keep an eye on. I think that’s one thing is just watch that FHA default rate and see what happens with that in the next 12, 18 months. And I think we’ll have an idea of where maybe the defaults are going. But in the trenches, what I’m seeing as I talk to customers and I look at their mortgage statements and we kind of go through this, whether they’re

you know, customers that are refinancing out of an FHA or VA loan, or, you know, I’ve done some work myself working to, you know, purchase investment property with a VA assumption, it’s a whole other strategy we can get into in a bit. But when I’m doing that kind of work, I’m seeing a lot of loan modifications, right? So really, it’s not that the defaults necessarily aren’t happening, but the servicers are curing the defaults by, you know, extending the term out to the…

40 years on an FHA loan. Look, they can lower the interest rate by up to half a percent on an FHA loan to decrease the payment along with that term extension out to 40 years. Or they can take all the missed payments and put them as a balloon at the end of the term. Right. And so you’re just seeing loan modifications happen, where the servicer is really trying to work with homeowners right now because they do not want to see the default rate tick up and HUD is driving a lot of that HUD who backs FHA loans, right, is driving a lot of that.

in a sense that they are really paying servicers to do this because they don’t want to see the losses. So I can’t prove it, but I suspect that if we did not see as much loan modifications as we’re seeing now, that we would have a lot more defaults and foreclosures in the market than what the numbers tell us.

Mike Hambright (17:28.344)
Yeah. And I think the banks are, I mean, they kind of know, it’s not their first rodeo, right? So I don’t think they want to take houses back. I mean, contrary to a lot of belief, right? And then I think that, you know, probably helps that they, on average, have a fair bit of equity trapped in those houses now. So it’s not like before where the house was upside down and they’re like, you don’t have any skin in the game anymore. Like people have a lot of skin in the game now.

Justin (17:35.606)
Yeah.

No.

Justin (17:54.6)
Yeah. Yeah. I mean, people just don’t want to walk away, right? So we’re not seeing people that are anxious to walk away from their their 33 and a half 4 % mortgage, 2 % mortgage, whatever it may be, and, and give up their, you know, 50, 100, $200,000 in equity, you know, I think a lot of the defaults that I’ve seen personally, and a lot of the loan modifications, they are on those lower equity borrowers that bought high in 2021, early 2022.

Mike Hambright (17:58.604)
Right?

Mike Hambright (18:11.405)
Mm-hmm.

Justin (18:22.872)
kind of towards the end of the COVID appreciation wave where they bought at the peak of it. And now they are struggling a little bit to hold on to the house. they’re not quite as motivated, but that’s a pretty thin sliver of the overall mortgages that are out there. And I think going back to a little bit of what we talked about earlier with the rate lock effect and that easing, I mean, I think a couple of months ago, the number of mortgages outstanding above 6 % just crossed over.

the amount above 3%. So there more 6 % plus loans and there are sub three loans now. Yeah, that’s new over the last few months that crossover just happened.

Mike Hambright (18:57.366)
Wow, that’s changed. changed. That’s first time I’ve heard that, so that’s great.

Yeah, yeah. So let’s talk, if you had a crystal ball, I know we think…

know, Jerome Powell’s gonna be out soon and mortgage rates are gonna come down. Of course, some of that’s already, well, we know interest rates are gonna come down, not necessarily mortgage rates, and some of that information’s kinda baked in already, but if you had a crystal ball to see where things are going, and I don’t know about you, like I feel like there’s so much political noise where like, bombing Iran, there’s all this stuff going on. Like, it just feels like it’s a time when people, more people than usual are just like, not making any decisions, because there’s so much noise.

going on. But if you had a crystal ball and you could see where things are going in the mortgage industry and guess the retail kind of resale activity, where do you think things are going for the balance of 2026?

Justin (19:52.342)
Yeah, so I think, you know, we’ve seen over the last year and half a pattern and I’m big, Tommy Robbins talks a lot about pattern recognition, right? And so I’m big on that too. It’s like the pattern that we’ve seen is a general decline. I’m going to try to draw it with my finger here. We’ll see how this works. A general decline in rates, right? But not smooth, right? So rates in general over the last two, three years have gone down, but it’s looked like this. You know, so, so you’ve had peaks and valleys in the

Mike Hambright (20:06.978)
Yeah.

Justin (20:21.675)
decline of rates over the last 18 months. So, you know, what that means is I think we’ll continue to see that, you I would love to see, and I think there’s a good chance depending on what happens policy-wise and economically, but we’re seeing some really, last two weeks even, some indicators that maybe the U.S. economy is a lot weaker than maybe we’d hoped it was. And we’ve seen that the last six months really, and it’s kind of progressively, okay, well, we’re weaker than we thought. And then we see these negative job number revisions come out of the BLS last year.

where they said, hey, we gained this many jobs. I don’t have the numbers in front of me. Hey, we gained 200,000 jobs. Then the following month, they go, actually, we gained 90,000. We were off 55 % of that number. We overestimated by over 100%. So you’re seeing that the labor market picture especially is a lot weaker than I think the numbers had been telling us. And those numbers are getting revised to the worst now. So that is helping rates.

Mike Hambright (21:00.833)
Right.

Yeah.

Justin (21:20.513)
That’s helping mortgage rates go down, helping these inflation. We also have an administration now, and I’m not gonna get political about it, but they’re very friendly on housing. And Trump even talked about it in the State of the Union, he has two goals. Conflicting goals and difficult goals to achieve. So I don’t know if he’ll manage both, but he wants housing prices to remain elevated. So he doesn’t wanna drop in housing, right? Because he kinda wants to make everybody happy, right? He wants housing prices to remain high, but not climb any more than they are.

to protect equity of current owners and he wants mortgage rates to decrease to help buyers get their foot in the door. So we have an administration that’s very pro-housing in a sense that they want those rates to drop. And we’ve seen, I think over the last couple months, from Bill Pulte, the director of the FHFA, Federal Housing Finance Administration, organizations responsible for running Fannie Mae and Freddie Mac, backing all conventional mortgages, from Pulte and from Trump, talking and just lobbying out.

Mike Hambright (21:59.968)
Mm-hmm.

Justin (22:18.903)
You’re talking about political noise. Lobbing out these market strategies, like, oh, 50-year mortgages. We’re just going to throw that out there and see how the market reacts to what we all think. I’m not in favor that for a bunch of reasons, but that’s another conversation. 50-year mortgages, oh, and now they did announce that they’re going to buy, because the Federal Reserve refused to buy. I wouldn’t say refused, but they’re opting out of quantitative easing and buying back mortgage-backed securities, which would have a…

Mike Hambright (22:26.136)
Right.

Mike Hambright (22:31.107)
Yeah.

Justin (22:47.531)
which would make mortgage rates decrease, right? So they kind of soak up that excess demand in the marketplace, decrease the yield on a mortgage bond, which decreases mortgage rates, the very nutshell way to put it. But they’re kind of, they opted out of doing that for now. I think Kevin Warsh is likely the new Fed chair. He’s gonna be very much more pro quantitative easing, especially when it comes to buying up more mortgage backed securities and lowering rates. So we could see some of that come.

Mike Hambright (22:49.538)
Mm-hmm.

Mike Hambright (22:57.196)
Yeah.

Justin (23:15.607)
But even then, Pulte’s directed Fannie and Freddie to buy up their own mortgage-backed securities to the tune of $250 billion that they had in reserves, where now they’re going to take that $250 billion and essentially, I say get high on your own supply. I mean, that’s what they’re doing. They’re buying up their own stock. It’s a stock buyback or bond buyback in a sense for them. But they’re going to say, well, hey, we’ll soak up that excess demand since the Fed won’t do it. And when that news came out in January,

Mike Hambright (23:25.4)
Mm-hmm.

Mike Hambright (23:31.16)
Yeah.

Justin (23:44.482)
Mortgage rates dropped a quarter percent just on the headline, right? And then they went up a little bit. So some people locked in low 599 rates. When that happened, then they went back up and then kind of turned it back down to 6%. And then the whole Iran operation is going on now. that’s rates have jumped about a quarter from that, right? So we’ve seen that, but I suspect when that situation stabilizes, they’ll go back down, right? So going back to where we’re going and what we’re seeing, I think

Mike Hambright (24:09.603)
Mm-hmm.

Justin (24:14.081)
from a housing policy, from an economic standpoint, we’re seeing kind of a consistent decline where we could be at five and a half by the end of the year, but not without some peaks and valleys along the way, right? We might have a time, I wouldn’t say it’s in the bingo, I wouldn’t put it on my bingo card, but it’s possible that, we are at six and a half and, hey, at another point in the year, we’re down to five and a quarter. I mean, that’s…

Mike Hambright (24:26.776)
right.

Justin (24:41.547)
that’s really foreseeable for what we’ve seen the last two years in terms of the peaks and valleys in that decline. Does that make sense?

Mike Hambright (24:47.554)
Yep. Yeah, you had a quick question here, what do you, you probably have an opinion on this at least. What impact do you think AI is gonna have on the housing industry?

Justin (25:00.407)
Yeah, I think the biggest impact really too. we’re going to continue as mortgage lenders and real estate agents, I think we’re going to continue to see margin of depression across those industries, right? Largely a good thing for the home buyer, right? So we’ll see margin of depression fueled by AI and competition there. But again, people that are efficient will always outpace the market. People that are using AI are still going to earn more in a sense.

Mike Hambright (25:27.992)
Mm-hmm.

Justin (25:28.459)
they’re doing more volume. Those that don’t will get pushed out, right? Versus those that don’t embrace it. From a macroeconomic standpoint, I think we’re starting to see, and I don’t know if you read this piece, but it was really good. I think it was Cittrini research. They’re kind of really negative AI piece. Take a look at it. It’s kind of disturbing, but, and so it’s made its way. I don’t think we’ll see that kind of a scenario, but it basically calls for an AI apocalypse. In a nutshell, job apocalypse, economic apocalypse.

I don’t see us going that far, but there is a very real and rising risk as you listen to what people like Elon Musk are saying and just others that are in the industry, about 20, 30 % of people that work on AI are starting to really ring this alarm bell on job replacements and how we can see eight, nine million Uber drivers and truck drivers out of a job having to retool.

So among many other sectors, this is an example. But I think if we have that kind of job disruption, obviously that’s going be negative for the housing market, right? Because it’s less people that can afford to buy and the people that do own homes, so white collar workers who are making up basically the top 10 of earners are what, 60, 70 % now, the discretionary spending. Those are the workers that are most exposed to this, right? So we’re looking at

Mike Hambright (26:34.402)
Yeah. Yeah.

Mike Hambright (26:47.65)
Hmm. Right, right.

Justin (26:52.695)
you know, who’s driving the economy and who’s buying the houses, those move up buyers that we talked about that have three or four or five, you know, whatever kids or whatever they’re growing out of their $500,000 house, they’re buying a $900,000 house. Those are the home buyers and homeowners that are driving that economy. And they’re also among the most exposed to disruption and AI. mean, think about software engineers is among the first line, you know, up until two years ago, that was a very reliable, you know,

low to mid and even in some cases high six figure income earner. And now 70 % of those jobs are disappearing. You still have some, but it’s not what it was. It’s no longer like holding ticket.

Mike Hambright (27:23.651)
Yeah.

Mike Hambright (27:31.054)
Yeah, it’s going to be an interesting couple of years, I think, to see how AI is going to impact the economy.

Justin (27:36.279)
Yeah.

Well, it depends on how well people adapt and retool to, right? So we’ll see some of that, but a lot of people are change resistant, and I think those are the ones that are gonna get hurt the most.

Mike Hambright (27:42.892)
Yeah, yeah, yeah, that will happen. Yeah, yeah.

Mike Hambright (27:52.706)
Yeah, we’re gonna find out. hey, Justin, would you mind, you’ve been a part of Investor Fuel for a little while now, would you mind just giving a quick testimonial about your experience? Not a of people know that we even have a service provider group now, so it’s not just real estate investors, we have those that kind of serve the real estate industry, but would you mind just sharing your experience?

Justin (27:55.008)
Nah.

Justin (28:10.869)
Yeah, Investor Fuel has been fantastic. mean, I know connected with you a little bit offline, Mike, and we talked about some of this. for me, the way that I look at it, and I’ve been a part since August. So coming up on seven months, it starts to be long enough where you start to go, hey, is this working? Is it worthwhile for me and for my business? And the answer so far has been absolutely. And that’s going to be ultimately

the connections, the knowledge and the expertise. It’s like, I’ve been doing this five years, so I have some expertise, especially in my lane, but being able to kind of go across functions and have deep conversations with people that are, you know, top tier in what they do, whether that’s a traditional flipper, whether that’s people that are doing sub twos, just these different real estate investing strategies. And even within the service provider group, tax preparers, was fantastic. I know like Melanie at one stop. And so, I mean, there’s been…

some really just fantastic side and hallway conversations that have been immensely valuable, even outside of just the content that we have during the mastermind. So to me, I look at it from a, I don’t really know old enough to use this term, but Rolodex, I’ve never had one, but I know what it is. So the Rolodex of contacts that I’ve been able to compile in six, seven months, hey, I know if I need this, I can call this person type of thing. And some of those conversations and the learning has been amazing.

I that. Thank you.

Mike Hambright (29:35.798)
Yeah, glad to have you in the group for sure. Awesome, well hey, thanks for sharing some insights on what’s going on in the mortgage industry, the housing industry. I even though we talk a lot about the retail side today, that impacts real estate investors because obviously most of this inventory is gonna find its way to the retail market. So good stuff. So Justin, thanks again for joining us today.

Justin (29:49.6)
Absolutely.

Justin (29:57.259)
Yeah, absolutely. Appreciate that invite.

Mike Hambright (29:58.764)
Yeah, everybody hope you got some good insights from today. It’s important to keep your ear to the ground of what’s going on in the mortgage side, even if you’re not in the mortgage industry, like that impacts, that impacts the bottom of your funnel, like where the stuff is going. Even if you’re a wholesaler, you’re selling to a fix and flipper or a landlord that this stuff is definitely impacted by. So appreciate you guys joining us. We’ll see you on the next show.

Mike Hambright (30:21.688)
Cool man, thanks.