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This is mortgage mindset,

a mortgage matchmaker series.

And today we are joined

by the one, the only,

the name on the door.

Sherry Riano. Hows it going?

It's going pretty good.

Can't complain. Good.

So we are going to be talking

today about the CPI report

that's coming out this

week on the twelveth.

That is by the US Bureau

of Labor. And Sherry,

I'm super excited to hear what

you have to say on just

what the report is.

How does it affect us in our

daily lives in real estate?

what's your predictions

for this report?

And really just get

a feel for it.

So I'm going to just hand

it over to you.

Let's get this thing started.

All right. Wow.

It's a lot of pressure today,

but yeah,

the consumer price index,

so what that is,

is the average price of goods

over a period of time,

such as food,

housing and transportation.

Housing is a big one there for

us. Housing is a huge one.

Yeah.

That's where we are in the

world. Right. That's It.

It's also a key indicator of

whether we're in inflation.

And of course,

based off the tapping the brakes

on overnight lending rates.

Right. Yeah. The fed said, yeah,

I'll tap the brake a little bit.

Looks like they feel like that

they're getting it somewhat

under control. Of course,

we're at somewhere around

3% right now.

They want to have it basically

two and under.

So we're getting there.

So what they have initially

done has taken effect.

We have seen the inflation

numbers come.

Consistently 9% over the summer.

Yeah,

it does kind of blow my mind

that there needs to be some

level of inflation. Right.

Their goal is not 0%,

the goal is 2%.

And so you hear the cost of

living increase and

stuff like that.

And so that's kind of where all

these numbers tie into.

But now we're seeing gas come

down. That's it. Yes.

I put gas in my car for 260.

I could do that. A gallon.

That worked for me. Yeah,

of course,

the milk is still kind

of hefty out there.

The grocery bill is still

a little steep.

and I think hopefully we're

going to see that come down

a little bit more.

I know that we just went through

the holidays and so I had

read before Christmas

that this was supposed to be

expected to be the biggest

travel holiday since.

Before COVID Before COVID And it

was absolutely. That's huge.

That means people are

out spending money.

That means people are traveling

and they're feeling a lot more

confident about where

the world is,

I think a little more secure.

Where before they were still a

little nervous about traveling

and being in that condensed

little can that we

fly in the air.

Sherry, in your 20 plus years,

have you ever seen inflation

at 9% like that before?

No.

Really? That's secure. Okay.

Have you ever seen an

inflation kind of,

I want to say feels like,

almost like a bouncy ball where

it's just like bouncing up and

down. Over the last few years,

we've seen such a

high inflation.

We've seen inflation come down.

Have you ever seen anything

like this at all?

Not at the rate that

this all occurred.

It was like we went from zero to

9% in a matter of no time.

So I have to openly admit that

some of the guys that speak

about this Ryan Hill Barry B.

Barry B. Long time, was saying,

hey,

you are letting this inflation

number get out of control.

And the fed was sitting there,

no, no, we're good.

If we go up to six, well,

they let it go up to nine,

and all of a sudden they want

to slam on the brakes.

So there were people out there

talking about, look,

we need to try to back this

number down a little bit before

it gets too aggressive.

But

I'm not the fed.

I'm just telling you what

happened Monday morning,

quarterback.

This is exactly how

it feels like.

so how does the CPI report,

how does that affect real know,

how does it affect interest

rates, property values,

just anything? Well, I mean,

the reality is that when short

term lending goes up,

mortgage rates go up because

it's part of selling the bond

and money's moving money. Right.

Even though the short term rates

are not a direct effect

to mortgage rates,

they do have an effect.

Right.

So that can affect the

interest rates.

And obviously we saw

rates go up to 8%.

So that obviously happened where

property values are concerned

right now,

I don't think much is going to

stop the increase of property

values just because there's

just not enough inventory.

People keep running around

talking about,

hey, it's 2008, oh my God,

we're going to have a collapse.

No, we're not,

because we just do not have,

we have more people than

we have houses for.

When you drive by any street

quarter and see another housing

rental apartment going

up as fast as it can,

because they have more people

coming into the area

than they can hold.

It's an indicator that we don't

have enough housing.

Not only that,

I think also the quality of

buyer is so much different

than it was in 2008,

where you would have someone

financing 102% on an adjustable

rate mortgage and really just

throwing all the closing costs,

everything in there going

in upside down,

and then the payment with

balloon two years

later than that.

They weren't even qualifying

with income documents,

asset documents.

We were doing nana loans like it

was no tomorrow, no income,

no assets.

And we paid for that dearly.

And I think that as we have seen

with the millennials and I

think with Gen Z, I mean,

they lived through that.

They saw friends get taken

out of their homes,

friends no longer in school

because they didn't live

in the area anymore.

I think it's affected them.

I think that's why they take

it very seriously.

when it comes to buying,

they really want to make sure

they've gotten all their

questions answered,

that they're comfortable

they're not comfortable with

having a serious debt to income

ratio when that percentage gets

to a certain point they're

not comfortable with,

I think it's a whole different

person and personalities

that buy today.

Millennials have been through a

significant amount of world

changing events.

The millennial

would rather have a dog than

a child. Yeah, absolutely.

And I also read that people are

buying fenced in yards,

not for kids anymore,

but for their pets. Yeah.

The mindset is just totally

different because the cost of

things, you think about it,

a dog or a cat,

you're not going to have to have

childcare to think about. Right.

Which is what?

It's been a hot minute,

unfortunately, guys,

since I've had a kid

in childcare,

but what are we looking at

nowadays? Two grand a month?

Oh my gosh,

that's a house payment.

It's a house payment.

you're reminded of the memes of

this person at the gas pump

that's like weighing, like,

did I eat today?

They're thinking about filling

up their tank and did I eat did

I eat tomorrow? Exactly.

I think also rent,

as it's reported in

the CPI report,

it's a huge motivator for people

to be moving.

If the CPI report shows that

rents are continuing

to continue.

Go up and go up and go up.

There's no sense in someone

paying $2,500 for rent if they

can afford a home. True.

There are people though,

that would rather pay that rent,

even pay more to have a

lifestyle that where you just

get out and walk. Yeah, right.

downtown living,

we don't have a lot of that.

I mean, Carrie does now.

I mean they've really made it

friendly and made it available.

But the new park is nice.

Yeah, but I mean,

like if you look at Raleigh it's

really not that. Know,

when you think about a big city,

right?

You think about New York City,

you think about you,

you think about these bigger

really and they're really

cities, not towns,

but they've set it up where you

can do all the walking and walk

to work and go to a grocery and

go to your drugstore and go out

and have brunch and you never

have to get in a car.

And unfortunately,

I know in our state we are

really dependent on

an automobile.

There's just very few towns or

cities set up to be able to walk

from the start of your morning

to the end of your day.

I think certain districts in

Raleigh are trying to change

mean they're really trying to

push for that. Unfortunately,

that comes know clearing

of some know building.

where there was one home on

three quarters of

an acre an acre,

you're building four or five

townhomes to replace that.

And so that also increases

property value of areas.

You have to think about the

people that are still

living there.

There's a lot to think about

when you're doing that to an

existing neighborhood.

but I think builders are also at

the point of do it or

be left behind.

Yes, absolutely.

They don't have an option

anymore of not to do it.

we still have

a lot of inventory to kind of

build up to in order to even

kind of meet the demand

that sits today.

so it's a little bit crazy.

so you want to talk about

predictions for 2024? I do.

I wanted to talk about

predictions for 2024 but also I

want to know what your thoughts

are on the CPI report that's

coming out on Friday.

Do you think we're going to

have a higher, lower?

Do you think with the holidays

that we just experienced where

so many people were

more traveling,

so many people were getting

out of town,

do you think we'll see

that showing up,

people shopping more because

they're buying gifts for maybe

that brother or sister or cousin

that they haven't seen in three

or four christmases?

Do you think we'll see that?

I think the possibility is there

to see some tick up in that just

because Americans have been

spending so much money,

it's something that's been

constantly talked about that we

have more credit card debt than

we've ever had before.

and that's very interesting.

So when you look at it that way,

my answer would be yes,

it probably might tick up.

Let's hope it doesn't really

hit a huge, large increase,

but I would say somewhere

between three two and three

three, probably, yeah.

I think the general mindset of

most investors today is like

they're going to have reductions

in the prime rate.

The Fed's going to drop rates

this year multiple times,

and so they no longer have to

price in that potential for

another hike unexpectedly.

I think that's the biggest shift

we've seen in interest rates

over the last 60 days, 80 days,

is the investors taking away

that insurance policy.

They were already building

into the rates. Right.

So that's nice. Okay.

And then the effect

of the holidays,

which you've kind of

already discussed,

we're going to see the increase

because we all went and had a

lot of fun with a credit card.

That's it? That's it.

Don't tell my husband.

We've had some credit

card excitement.

One thing I do want to point

out, just specific to our team,

is we had one of the busiest

Christmas to New Year weeks

we've had in maybe four

or five years,

where we had multiple contracts,

multiple mortgage applications

happening every single day,

busy every single day.

And I think that really is a

snapshot of what's happening

in the market already,

where people are already

preparing. If you wait too long,

you are going to be priced

out of a home.

If you're not active in

that first quarter,

you may not be able to afford it

in the second quarter. I agree.

I think that if you want to buy

and are looking to

buy this year,

the first quarter of the year

would be the great time,

and the fourth quarter would

be a great time, probably,

to refinance that rate so that

you're ahead of everybody else.

Because I think if you wait

until we actually see this true,

true decline in the

second quarter,

you are going to be sitting

with multiple

scenarios.

You're going to be sitting with

either you're paying way too

much for the property you've

got coming out of pocket.

Coming out of pocket because

they're going to want you to

sign an appraisal waiver saying,

I don't care what an appraisal

is for, you're going to pay me,

which can cost you more money

than that interest rate at 8%

could and we can break that down

for you at a lower later show.

But the reality is it would

cost you more money.

So it's just a lot of things

to think about.

So if you're sitting on the

sideline and you know you really

want to purchase this year,

it might be a good time to

reach out to an agent.

And if you don't have one,

please feel free.

We work with the top agents in

the area and have for years,

so we'd be happy to give you

a list of referrals.

Incredible partners.

Incredible partners they are.

And now it's time for market.

In a minute.

This is where we give you an

update on the conditions of the

market every single week,

no matter the topic of the show.

That way you always know what's

going on in the market.

Last week,

we saw an unemployment numbers

come in at 3.7%,

holding steady from

the month before.

216,000 new jobs were created.

Now,

what that means is we're

expecting a range somewhere

between 177,400 thousand.

So while that wasn't as many as

projected, also wasn't lower.

We typically don't see a benefit

in the market unless the numbers

come in lower than the lowest

expected number.

We also have to consider

that in December,

you have a lot of temp

employees hired.

that's going to really inflate

those numbers.

January is a big month

for layoffs,

mainly because those temp

employees are going back home.

so we could see those numbers

drastically reduced in January.

I think we will which will help

numbers even further

in February. Well,

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