In this episode of Money Talk with Tiff, host Tiffany Grant sits down with special guest Dave Ball from House Rich. They dive into the 2024 housing market and the top mistakes that homebuyers make.

Dave sheds light on the uncertainty of future interest rates and the impact on the housing market. He emphasizes the importance of budgeting before embarking on the home-buying process and outlines the significance of interviewing realtors and lenders.

Tune in to gain valuable insights and tips, and find out how to connect with Dave for more expert advice.

About Our Guest

David is a Navy veteran and graduated from the US Naval Academy with a degree in Econ. He also has seven years of experience in the mortgage industry as a loan officer and underwriter. He saw a lack of accurate and detailed home buyer education online and decided to fill the void through his platform @coinsnculture. His goal is to break down the sometimes-complicated mortgage process into layman's terms and help people buy their 1st home strategically.

David also hosts House Rich: The Real Estate Show on YouTube and all podcast platforms. There he breaks down a mortgage topic weekly and also interviews a subject matter expert in various aspects of real estate.

Connect with Dave

Website: https://www.houserichshow.com/

Facebook Group: https://www.facebook.com/groups/fthbschool

Instagram: @houserichdave

YouTube: House Rich - The First Time Homebuyers Show

Connect with Tiffany

Website: https://www.moneytalkwitht.com

Facebook: Money Talk With Tiff

Twitter: @moneytalkwitht

Instagram: @moneytalkwitht

LinkedIn: Tiffany Grant

YouTube: Money Talk With Tiff

Pinterest: @moneytalkwitht

TikTok: @moneytalkwitht

Timestamps

[00:00] Rates likely to drop to around 6%.

[04:46] Market timing is impossible, refinancing is an option.

[10:04] Tips for finding affordable homes and property taxes.

[10:45] Calculate monthly payment based on property cost.

[16:07] Larger lenders have community perks and grants.

[18:37] Podcast on home buying guidelines and mortgage.

Key Themes

• 2024 housing market trends
• Interest rates and inflation impact
• Budgeting for a home purchase
• The importance of interviewing realtors and lenders
• Understanding real estate markets within markets
• First-time homebuyer mistakes
• Where to find more home-buying tips

Support this Podcast

Copyright 2024 Tiffany Grant

It. You know what it is. That's right. It's time to talk money

with your money nerd and financial coach. Now, tighten those

purse strings and open those ears. It's the money talk with TIFF

podcast. Hello. I

am so excited because I have Dave ball on the line from house Rich.

Dave. And I have Dave on to talk about, first of all,

the 2024 housing market and what, what that's looking

like, and then also the top two mistakes that homebuyers

make in the process. So. Hey, Dave, how are you? Hey, good morning. Good morning.

Thanks for having me on your platform. Yeah, no problem. Honored to have you

here. So let's just hop right in for the audience. When we're looking at

2024, what are the trends? Or what is the

market doing? So the big answer to that

one is no one exactly knows. Like, not the definitive answer

I think anybody was looking for, but that is the actual answer. So, actually, this

morning I was researching this topic because I figured it was going to come up.

And I want to read you a few hitlines. It says, fed will hold rates

until July. That's from one source. Feds are likely to cut rates in

2024. Another hitline, feds cut interest rates as early as the first half of

2024. Fed likely to cut rates four times of 2024.

Here's when the Fed will cut rates. Blah, blah, blah, blah, blah. So

depending on who you ask, you'll get a different answer.

But I think what folks need to look at is kind of like their own

goals and kind of work from there for a little bit of perspective. Like, when

I got into the real estate industry in

2017, like, a normal rate was

5%. During COVID

the Fed cut the benchmark rate,

which is the cost for banks to borrow money. And so they cut that rate

down to, like, zero point 25%. Usually it hangs around about

2.5%. That's why rates were, like, super low in the early

2020, 2021, and the housing market kind

of went out of control. Home price went up like 43%

at one point. What that caused was inflation, which hit

like 9.1%, like in June

2022. And so since then, as we've seen, the

Fed has been increasing that benchmark rate in

order to combat inflation. So what the Fed cares about as far as interest

rates is cutting inflation. And so we were at 9.1. I

think right now we're somewhere between, like, three and 3.8%. But the goal

is to get it down to 2%. And the reason I talk about that is

because the Fed doesn't really care about the housing market. They

don't care about interest rates. Their goal is to combat inflation. The housing

market is just unfortunately a casualty of that.

And so from what I've seen that the people from the

Fed have actually said, like Jerome Powells and other people that are part of the

Federal Reserve have said that they're just going to follow the data. And

so they'll make a game time decision, like every time they meet,

typically once every two months. So they'll look at the data at that present time

and say, hey, we will keep rates steady. We will cut rates based on what

the data says. We're not going to make any predictions in December

and January and February on what's going to happen in June,

July and August. But most likely from what I've

seen and based on the trends that are going and inflation being kind

of going downwards, that most likely, worst case scenario is that they're hold rates.

And so rates right now are like in the 7% threshold. All the

information I've seen from reliable sources like Fannie Mae,

I've seen Morgan Stanley, it says that rates will, unfortunately for some, being

like the 6% threshold, probably at the lowest throughout the course

of 20 to 24. So I think where folks are looking at the housing market,

we need to normalize like 5%, 6%. Rates

are just the new norm. And I say the new norm, but they're kind of

honestly the norm norm because as I mentioned, like back in 2017,

rates were 5% when I got into the industry and nobody was freaking out

about that. Folks kind of are freaking out now because rates used to be two

and 3%. But yeah, the housing

market, there's no signs of a crash. The housing market inventory

is super low. Depending on where you read. We're like somewhere between

1.5 million and 6.5 million houses

short. So if you just go back to basic econ 101, the

supply is super low, even though the demand is a little bit low

due to rates. So housing market

2024 rates may go down, but there's still going

to be a demand. So there's no data that

supports any sort of housing market crash that I think some

folks are waiting on in order to buy their first property.

So to me, just focus on your budget, and if you're ready mentally

and financially, I would jump into the market because there's never a perfect time

to buy a home. Yes, I'm so glad you

said that because I tell people all the time, you cannot time a market. I

don't care what market it is, it's impossible.

And I jumped in in 2017 as well. And one thing

I did do during the pandemic was I refinanced. So I was

able to get that good rate. So that's also an option

later on down the road, if they ever go back down

to where they were, you can always refinance. So I

wouldn't let that hold you back. Another thing, to your point

about the inventory, actually, and I was

not thinking about this interview when I did it, but yesterday,

I just looked up how many houses were available in my area,

and it was like 40. And I was like, oh, wow, in the whole

city. So, yeah, to your point, it's definitely a very

strong market for both sellers and

buyers. It'll probably be competitive, but you can get a

house if you want a house. Yeah, sorry, one

more tidbit. And I think what folks, a lot of folks don't realize

unless you're actually in the business, there's markets within the

market. So even in your local market, like, I'll give an example

here. I'm in the Dallas market. So

the market, like, between $300,000 and

$200,000. That market will never crash. That market is always

on fire. Rates could go to 10%, and that market would

still be out of control. Earlier this year,

I helped somebody buy a home that was $200,000 here in

Dallas. We looked for like four months, and we put in

offers of homes that had 44 offers, 19 offers, 16

offers, 17 offers. And this is back when rates were like, at the high high,

almost close to 8%. So even in your local market,

their markets within market, and whatever the bottom of your local market is,

that market will never crash because home prices continue to go up, but

wages don't. And so folks are always fighting at the bottom of that

market just kind of fy, depending on what price bracket you may be looking

in. Yeah, that's a really good point. And another thing,

too, because I thought about selling my house a couple of

years ago, actually. Was it 2022? Last year? I

thought about selling my house, and when a realtor looked

up comparatives and things like that, I would have been the

only single story house available

in the whole city. And I was like, whoa.

So to your point, with the markets within the

markets, depending on what people are looking for, it could be

favorable for you. So now that we've talked about

trends and what's coming up next, now let's get

into the mistakes that some first time home buyers

make. And so what is one top mistake that they

make. So I think the biggest mistake I see first time home

buyers, and honestly, sometimes second time home buyers is

not knowing how to budget for a home. So I'm a realtor now, but I

used to be a lender. Sometimes folks, I used to work at a bank. Sometimes

folks are coming to the bank. Sometimes folks apply online for

a home. When they apply online, they say, hey, I want to qualify for

a $400,000 home or whatever it is. And so I do

the pre call for them online, then I give them a call. If they're

approved or it didn't work, I will give them a call either way. And then

at some point in the conversation, I would just ask them. I'd be like, okay,

yeah, you're pre approved for $400,000.

Just curious, what do you think the monthly payment is on this property? And

it was always crickets in person. Kanye, shrug. Like, folks

never knew what that payment was. And so here's the

issue with that is always tell folks, start with a monthly Payment

in mind and work your way back from the home price. Because when you start

with the home price, you're going to talk yourself into whatever

that number is. Because what happens is when you're looking at $400,000

homes on Zillow, now, you're looking at, there's

this nice restaurant down the street. Look at this school district, look at the pool,

look at what I can get for $400,000. You've already mentally moved

into that neighborhood. And so what happens is when I tell

you, hey, that payment is $3,300, but your budget was

$2,500. You're just like, hey, it's only $800.

I'll probably get a raise next year.

I can do DoorDash on the week. You talk to yourself. You just convince

yourself about all this stuff that you'll never do to

the side hustle and stuff like that, you basically end up

blowing your budget. And that's where I hear about folks that are

often like, house poor. It's just like, hey, I spent way too much on this

home. And my initial thought is always, I'm pretty sure this person started with the

home price of mine and not the budget. So that's what I suggest

to everybody. Start with a budget and work your way

backwards to the home price. And this is just a quick way on how to

do it. Let's say your budget is, you want a

$2,000 monthly payment, just go to Google

and type in the word like mortgage calculator. And a mortgage calculator will come

up on Google and then start putting in loan amounts that get you

to about 60, 70% of

$2,000. And so let's say you

put an amount of like $200,000, interesting enough, and they get you like a

$1,200 monthly payment, 60% of

2000. And then now you just got to go to Zillow or

wherever you go to realtor.com and start looking at

$200,000 homes in the area you want to look at. You'll find one of

two things. You'll find that there are no $200,000 homes in the areas you want

to look at. So you got to kind of make a decision there. Or you

may find like, hey, okay, I can kind of work with these homes, these

$200,000 homes in my area. It may not be my dream Home or

my ideal home, but hey, I can kind of work with this and then just

go to click on a couple of homes. And then now you can look at

and find out what the property taxes are on those homes. So now you have

a principal and interest payment and you have the property taxes. It's going to give

you the yearly amount. Just divide by twelve. Insurance is a little bit harder to

figure out, but you want to just use whatever number zillow has. I say

that and just add up those three numbers, your principal and interest payment that you

got from the Google calculator, your taxes, and then add up

your insurance. And it may be above, it may be under

$200,000, but you can kind of finagle those numbers

in order to find out a monthly payment that's kind of within your

budget. And I say when you work backwards that way, it may not be

like the price range you want it in, but that's the price range

you can afford. And so that gives you folks

a better starting point for the home search. Because like I said, once you start

with the price in mind, you're going to talk yourself into whatever that

budget is. And I know that with like 100% certainty because pretty

much it's rarely that someone balks

when I tell them what the price is, even though it's well above their budget

a lot of times because I can see like their debt to income ratio, which

is very high usually. But it's not my call to

tell folks what they can and can't afford. Right. And

I love that you bring that up, having your budget in mind first,

how much you actually want to spend first. And I see this translating

well to cars as well.

And having people have what is going to be

that monthly payment and then working your way from there. I love

that advice. So now that they have that out the way,

what is another mistake that they could be making first time home

buying? So one of the other big ones is not actually

interviewing your realtor or your lender. It's the biggest

financial decision that most people will make. And I always find

it od that folks rarely interview

my platform. I always say, hey, interview your realtor.

Interview your realtor. Interview your realtor. I've actually not had a single person, maybe

because I put out a lot of content online so folks feel they don't be.

But I've not had a single person ever interview me. And I'm like, oh, how'd

you find me? Social media, how'd you find me? I found you on YouTube and

I was like, oh, did you watch the, the videos about this and that? Yeah.

I was like, okay, well, I'm not going to tell you to interview me. Maybe

folks, they feel like they know me because I just put out so much content.

But yeah, interview your realtor. Because some basic

questions you should ask your realtor is just a basic how long have you been

in the business? And I always say there's no right or wrong answer to that

question. The person that's super new may be super hungry and

ready to go in above and beyond. I know when I was super

new in the industry, I would drive anywhere.

Somebody told me I'd drive an hour to show them one house. I would

do all this stuff now, and I'm a little bit more. I value my time

a little bit more. I'll just say, like, we need a plan before we start

driving everywhere throughout Dallas to find home. But interview them, figure out how long

they've been in the business, figure out what areas they actually specialize in. Because a

realtor will tell you pretty much, I'll tell you, they can go anywhere as

long as their car can drive that far, which is cool. Sometimes.

Like, the first home I ever sold was in Fort Worth, Texas. I'd only been

to Fort Worth, Texas, two times in my entire seven years in Dallas.

But I was like, hey, man, I'm going to find you home in Fort Worth

because this is my first client. Like, it worked out for that client.

But honestly, I probably was not the best realtor for him because I didn't

know the intricacies of the Dallas Fort Worth market. But hey,

everything worked out because I did a lot of research on my end. I would

say, also ask them what price ranges they work in. Once again,

no right or wrong answer, but if someone's working

typically, like, in maybe a $300 to $400,000 price

range, they may not be the person to help you with that million dollar

listing, and vice versa. If somebody is just like, hey, I'm doing million

dollar homes, you may not get the same attention if you're looking, like, in the

200 $300,000 price range. So definitely interview your realtor. And

I would also say, same thing with your lender back when I was a lender.

So some questions you should ask your lender are one, just a basic one. How

long, what hours do you work? Because some lenders, believe it or

not, they're just like, hey, I work nine to five. That is what it is,

Monday through Friday, which is their prerogative. But if you need help on the weekend,

they're probably not the lender for you. I would say, like, what loan

programs they actually work with. I'll give the example.

When I was a lender, I never ever did a USDA loan in my four

years as a mortgage lender, but I would not tell anybody that

unless they specifically asked me. So if somebody was looking at a

USDA loan, I'd be like, yeah, I can help you out with that,

but I probably would have fumbled my way through the process because I had no

idea what I was doing. And that's a complicated loan. But if someone specifically asked

me, like, hey, how many USCA loans have you done? I would have told them

zero. And so I'd be, you know, I'll probably need

some help from my manager if there's some struggles here. But yeah, ask them what

loan programs they actually specialize in. And also, if you're looking for

down payment assistance, ask them specifically

what down payment assistance programs are you

the customer eligible for, not which ones they have. Because those

are two different answers because lenders have to actually qualify

in order to give out certain down payment assistance programs. Ask them which ones

you are eligible for because that may not be a fit

one quick tip or hack. Typically

like your larger lenders. I know folks are sometimes scared of big banks, but

typically, like, larger lenders will have something as part of their community

reinvestment act, which if you're

purchasing a minority neighborhood or maybe a lower

income neighborhood, they have big perks or

big grants and stuff that they can give you. Like, I know lenders that have

like $5,000, $10,000, $15,000 grants

literally just for buying in a certain neighborhood. So make sure you're actually

interviewing your realtor and lender, because, Jessica, you may say, hey, my

friend recommended them to me. I don't need to interview them. But I always say,

like, your friend probably has friends that you're not friends with, right? So

they just may not be the right fit for you. Just make sure you're

interviewing at least one or two realtors and

lenders. I think another mistake that first time home

buyers don't make because I always hear folks say, hey, my realtor sucked or my

lender sucked. I'm like, well, what was the conversation before you guys

embarked on this home ownership journey? It probably was none.

Yes. And I can definitely attest to that. When I

bought my house, I didn't interview anybody. I just went off of my friend's

recommendation because she was going through the whole process. Now, granted, I lucked

up. I had a bomb team, and I'm so grateful for them

still to keep in touch. But I could totally see how that could have went

south. And I didn't know anything about the process. And so they could

have easily gotten over on me if they wanted to. Luckily, they

didn't. But it could have been a possibility.

And I say that not even from like a get over you aspect, but just

sometimes you just have different needs. Let's say your friend could

have had maybe some credit challenge, or maybe, let's say your friend had no credit

challenges, right? They had an 850 credit score somehow, and maybe not

you, but just a listener. Somebody had credit challenges. Well, maybe you needed a lender

that was a little bit more judicial when it came to helping you with

credit or things like that. So just something simple like that is why I

say always interview somebody. Because just because your friend

scenario may not necessarily be your scenario. Like, no matter how

great they were with your friends, right?

Yeah, I think those are great tips for the audience if

they're looking to buy a house, whether it's first time, second time, third

time, what have you, I feel like those tips are definitely

applicable. So, Dave, if people are interested in learning

more about you, more about these tips or anything that you

have going on, where could they find you? Yeah. So since

you're listening on a podcast platform, you can check me out.

I have a podcast and YouTube channel by the same name, house

Rich, the first time home buyer show. So every week I break down some sort

of home buying news topic because a lot of times you see hyperbolic

hit lines and I break those down from a factual standpoint and also just break

down mortgage guidelines in layman terms. So right now I'm breaking out

my 2024 home buying guidelines. So those would be like my next six

episodes. I'm breaking down like the FHA loan program, conventional,

Naca, Va, USDA, et cetera. So if you want to get

some details on that, you can check me out there. If you're on social media

and looking for some short form content, you can check me out at

Houserich, Dave on IG

or TikTok. So I put out information there. Same thing, but

just in those 60 32nd slots. If

you're in Dallas, feel free to reach out to me if you're looking to

purchase a home so you can just dm me directly for that.

Got you. Well, thank you so much. And I'll make sure I have all of

those links in the show notes, so don't worry if you didn't get it. Check

those out and you can get in contact with Dave. So thank you so much

for coming on the show this morning. Oh, what's good? I appreciate you having me.

Thanks for inviting me on the platform. My pleasure.

Bye. Adios.

Thank you for listening, joining, and being a part of the Money talk with TIFF

podcast this week. You can check Tiff out every Thursday for a new

Money talk podcast, but if you just can't wait until next week, you

can listen to previous podcast

episodes@moneytalkwitht.com

or follow TIFF on all social media platforms at

moneytalkwitht. Until next time, spend wise

by spending less than you make a word to the moneywise is

always sufficient.