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Transcript
00:00So let me just explain briefly why I think rates are going to stay a little bit higher.
00:04It all comes down to bond yields. Just give me like one minute and I'll try my best to explain
00:09this to you. If you go on social media, people are saying that rates are going to get into the
00:13fives. They're going to get into the fours. I don't believe any of that. I think that rates
00:18are going to stay somewhere in the sixes next year. Mortgage rates are not controlled by the
00:23Fed. They are really influenced by bond investors and bond investors don't really think like real
00:28estate investors. They are majorly concerned with things like inflation and recession risk.
00:34When inflation is on their mind, if they're worried about inflation, that means bond yields go up and
00:39that pushes mortgage rates up. Investors are worried about the other side of the equation,
00:44which is a recession. They usually pour money into bonds that pushes yields down and take
00:49mortgage rates down as well. The market is telling us right now that bond investors are more afraid
00:54of inflation in the coming years than they are of a recession.
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