- 5 weeks ago
Recorded at the HousingWire Housing Economic Summit at the George Bush Presidential Library in Dallas, this episode shifts the conversation from forecasts to practical application: what should housing professionals actually do with economic data?
Odeta Kushi, VP and Deputy Chief Economist at First American, explains why housing economics behaves less like a machine and more like a living organism shaped by labor markets, demographics, inventory dynamics, and consumer psychology.
She breaks down the small set of indicators that explain most of the market story — mortgage rate drivers, inventory trends, affordability fundamentals, and demographic demand. The conversation also tackles common misconceptions about down payments, market timing, and the “date the rate” narrative.
For loan officers, brokers, and agents trying to make sense of a shifting market, this episode turns economic signals into practical insight.
Related to this episode:
Zeb’s LinkedIn
https://www.linkedin.com/in/zebulon-lowe-a02353a4/
Odeta's LinkedIn
https://www.linkedin.com/in/odetakushi/
The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire’s Zeb Lowe every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio.
Odeta Kushi, VP and Deputy Chief Economist at First American, explains why housing economics behaves less like a machine and more like a living organism shaped by labor markets, demographics, inventory dynamics, and consumer psychology.
She breaks down the small set of indicators that explain most of the market story — mortgage rate drivers, inventory trends, affordability fundamentals, and demographic demand. The conversation also tackles common misconceptions about down payments, market timing, and the “date the rate” narrative.
For loan officers, brokers, and agents trying to make sense of a shifting market, this episode turns economic signals into practical insight.
Related to this episode:
Zeb’s LinkedIn
https://www.linkedin.com/in/zebulon-lowe-a02353a4/
Odeta's LinkedIn
https://www.linkedin.com/in/odetakushi/
The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire’s Zeb Lowe every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio.
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NewsTranscript
00:00Odetta Cushy is the VP and Deputy Chief Economist at First American Financial Corporation.
00:05She's also prominent on LinkedIn, where she analyzes housing and mortgage market trends for industry professionals and consumers alike.
00:12On top of that, she's a prominent thought leader and co-host of First American's Our Economy content,
00:17frequently breaking down housing data, affordability, and market dynamics in accessible, story-driven messaging.
00:35Odetta, thank you for joining me.
00:36It's great to be here.
00:38Okay, so normally for Powerhouse, it's more conversational, and I don't ask specific questions, but since we're here at the
00:45Housing Economic Summit,
00:46I wanted to try something a little bit differently with kind of a fixed set of questions.
00:52And before we dive into those, I wanted to see if we could set the kind of a foundational approach
00:58to housing economics,
00:59because I feel like people that don't swim in these waters every day, they see housing economics more like a
01:07mechanism versus an organism.
01:10And correct me if I'm wrong or tweak my metaphor a little bit, but I feel like housing economics is
01:17more like an organism,
01:18because in a mechanism you have, when all inputs are known, you have like a fixed outcome.
01:27And in economics and housing economics, there are all of these factors that are constantly at play,
01:33that are constantly changing, and that are unknown.
01:36That can be everything from, you know, local policy to consumer sentiment.
01:41Is that a fair assessment?
01:43Is that a fair metaphor?
01:44I think that's absolutely fair.
01:45I mean, when we think about housing, interest rates come to mind, but that's just one piece of the puzzle.
01:51Housing is at the intersection of all parts of our economy.
01:56Obviously, the labor market, you mentioned consumer confidence.
01:59When people are transacting, buying, and selling homes, this is often the largest financial decision of their lives.
02:05And so they need to feel strong about their labor market prospects, about, you know,
02:10that they make sure they're gainfully employed and feeling good.
02:12And so all of these different pieces, the labor market, consumer health, consumer spending, consumer confidence,
02:20obviously interest rates and broader macroeconomic factors, local market conditions, regulations, policy,
02:26all of these play into housing market and our outlook for the housing market.
02:31And so it is constantly changing and evolving in that way.
02:35Okay, perfect.
02:35So I've got a fixed set of questions I'm going to ask you and I'm going to ask a few
02:39other housing economists later today.
02:43And I think that will serve kind of as a platform to illustrate the way that you view the market
02:47and interpret any relevant data signs versus the other economists.
02:52So you ready?
02:52Okay.
02:53I'm ready.
02:53Okay, so when we talk about housing economics, for housing professionals that are out interacting with home buyers
02:58and referral partners, what are the handful of core forces or metrics that, like, LOs and even agents
03:04should really focus on to understand, I'm sure you're familiar with the Pareto principle, like the 80-20 rule?
03:09Of course.
03:10Okay, so to understand 80% of the market story, what core 20% of factors or data points do
03:17you think people should focus on?
03:19Well, so, you know, oftentimes we talk about interest rates, but rather than say, well, understand interest rates,
03:25I think it's important to understand the drivers of interest rates.
03:28So when people are asking me, where do you think interest rates are going to go,
03:33it's very challenging to forecast interest rates because it's a function of so many different factors.
03:38So I tend to take a step back and say, well, let's look at inflation and let's look at the
03:43labor market
03:43because that has implications for what the Federal Reserve is going to do and ultimately what will happen with mortgage
03:49rates.
03:50And so when we talk about the interest rate piece, I say look at inflation measures and the labor market
03:55dynamics
03:55to try and get a better understanding of where that might be headed.
04:00Inventory, obviously, I think high-frequency inventory measures weekly, if you can get it,
04:05to try and understand sort of where we're headed when it comes to inventory.
04:08You can't buy what's not for sale.
04:10And so I always think it's important to have a good pulse and then to understand the nuances
04:15because when we talk about active inventory, that's sort of your stock measure.
04:20So you can have growing active inventory because markets are staying on the market longer
04:25because people aren't buying and so they're kind of piling up month after month.
04:29But then new listings, that's sort of the, I think of it in a bathtub metaphor, right?
04:35So you have like the stock of active inventory and the water in the tub and then new listings are
04:40what's flowing in.
04:41We find that that's a better predictor of sales activity.
04:44So in markets where new inventory is growing, that tends to be where we're seeing higher listing sales activity as
04:50well.
04:50So I think inventory is the other piece of it.
04:53And then taking a step back, it's always demographics.
04:56When I approach forecasting, when I approach how we look at the outlook for the housing market,
05:02I always come back to fundamentals and demographic trends are a big piece of that.
05:07So what's happening with population growth, what's happening with migration,
05:11looking at various generations and whether they're aging in or aging out of home ownership.
05:16And so we're always keeping a beat on that as well.
05:19So there certainly are more beyond that.
05:22But I would say, you know, the drivers of interest rate dynamics, of which there are a lot.
05:26But right now we're looking at inflation and labor market dynamics, inventory measures, and then demographics.
05:32What are some important or interesting demographic trends that you're seeing right now?
05:36Yeah, that's a great question.
05:37So we still think that there's a housing market tailwind from millennials aging into their prime home buying years.
05:44Millennials are a really interesting generation.
05:45They're the largest living generation at the moment.
05:49And what we find in the data is that they're making these lifestyle decisions that are highly correlated with buying
05:55a home,
05:56like getting married and having kids.
05:58They're doing it later than their generational predecessors.
06:01And so we're finding in the data that when you look at the 30-year-old millennial
06:05and you compare their home ownership rate to the 30-year-old Gen Xer, the 30-year-old baby boomer,
06:11their home ownership rate's like six percentage points behind their generational predecessors.
06:16But as evidence of the trend I just mentioned, when you look at the 42-year-old millennial,
06:21their home ownership rate gap goes away with the Gen Xer.
06:24And I think that's evidence of this trend that millennials are interested in buying homes.
06:28They are buying homes.
06:29They're just doing it later in life.
06:32Do you think that's an affordability issue or like a maturation issue?
06:35I think it's a little bit of both.
06:37I do think that the affordability constraints that we've faced in the last couple years
06:41have been particularly acute in keeping some buyers on the sidelines.
06:44But we're also seeing that millennials are staying in school longer
06:47and they're prioritizing their education, which is ultimately yielding higher incomes.
06:53And they're pushing these lifestyle decisions,
06:55which is also pushing the decision to become a homeowner further along in life.
07:00But their home ownership rate is just over 50%.
07:03There's a lot of them and there are a bunch of them still on the sidelines
07:07waiting to jump into the housing market.
07:09And I think that this is a tailwind for housing demand.
07:12But then on the other side of the generations, you have baby boomers.
07:16And the population of 80 plus is expected to about double between now and 2040.
07:22I know there's been a lot of mention of like silver tsunami and all of that, right?
07:27I think it's more like a silver glacier, right?
07:29Demographic trends move slowly.
07:31So we'll see people age into, you know, age out of home ownership rather over time.
07:37And I think there will be a lot more of that.
07:39Certainly in the 2030s, we'll see it start to pick up speed.
07:42And baby boomers own a lot of homes in prime locations.
07:47They will need some work to be made, you know, to sort of renovate them
07:53so that they're interesting to the next generation of buyers.
07:56But there's a lot of them, and they'll add some more supply to the market
07:59as we look out, you know, further horizon, time horizon.
08:02I spent quite a few years in the reverse space as well.
08:05So the silver tsunami thing, and they sold that for,
08:07they've been selling it for 10, 12 years, I think, at this point.
08:11Yes.
08:11And the tsunami, by its very nature, is pretty fast moving.
08:14Right.
08:14Yeah, it's definitely, it's a glacier.
08:15If it's anything, it's a glacier.
08:16Yes.
08:16Okay, so you touched on some of this, but when looking at shifts for,
08:23to predict demand, buyer demand and affordability,
08:28what are key indicators specifically for buyer demand and affordability
08:32that professionals should be on the lookout for?
08:34Yeah, so, you know, buyer demand, obviously all the listings data that,
08:38I know Mike Simonson's here today, and he'll be talking a little bit
08:41about those metrics and what we're seeing.
08:43I always come back to, you can't buy what's not for sale,
08:45so you need to have healthy inventory levels to see sales activity happen.
08:50From affordability, I'm optimistic this year,
08:53because even if mortgage rates stay where they're at, right,
08:57even if they sort of hover between the 6% to 6.2% range,
09:01what we've been seeing is that income growth has been outpacing house price growth,
09:06and that's allowed affordability to slowly come into better balance.
09:10When you say outpacing, do you mean within the last couple of years?
09:14Because over a span of 30 years, it hasn't, right?
09:17Yeah, longer time horizons, not so much.
09:19But since, you know, in the second half of 2025 is when we start to see our data show
09:24that house price growth, because now our first American data and analytics
09:28house price index is showing that house price growth is at the slowest pace since 2012.
09:33So it's below 1%, still positive, but below 1%.
09:37And that, while income growth is stronger, and so that's allowed affordability to improve.
09:43We've actually seen the best affordability levels in over three years.
09:46That's a function of the dynamic I just mentioned, you know,
09:49income growth outpacing house price growth.
09:51It's also a factor of mortgage rates have come down.
09:55So that's been helping as well.
09:56But even if mortgage rates stay flat, if that dynamic persists,
09:59we'll still get some slow affordability gains.
10:03If you could teach a, let's just say mortgage professional, not keep real estate out of it,
10:09if you could teach a mortgage professional one economic concept to be well-versed in, what would it be?
10:17Wow, that's a great question.
10:19A lot of things are coming to mind.
10:21One economic concept.
10:24There's a lot.
10:25I mean, there's, and my mind is going to, you know, some sort of behavioral economics concepts like anchoring,
10:32anchoring in a recency bias, right?
10:34So we saw when mortgage rates started to climb, and they climbed very fast,
10:39and that was really the issue is the rate of change going from such a low mortgage rate to a
10:44high mortgage rate.
10:46But we were subject to some anchoring biases, which is that we're, you know,
10:51we were just used to this low mortgage rate environment, 3% mortgage rates,
10:56and so suddenly that's sort of the new normal.
10:58And we keep anchoring to that period in time as normal.
11:02But that's the exception to the rule, right?
11:04Historically, mortgage rates have been above 6%, if you look at the historical average.
11:08And so we're not too far above, you know, average in terms of mortgage rates.
11:15The bigger issue is not just the fact that mortgage rates are 6%,
11:19it's that they went up from such a low base,
11:21and also that they're in combination with very, very high house prices,
11:26historically high house prices.
11:27And that's really what's been contributing to the affordability environment that we find ourselves in.
11:35And beyond that, I think the bathtub analogy that I mentioned earlier,
11:40I do think that that's an important nuance that is sometimes missed when we look,
11:44when we track inventory data, is this active versus new inventory distinction,
11:51because active inventory can pile up.
11:54I think it was just mentioned in a recent, in one of the talks,
11:57maybe Logan mentioned it, that when interest rates go up,
12:00we tend to see inventory increase.
12:03And part of that is a function of, well, you know,
12:05people are sort of waiting on the sidelines a little bit more.
12:08So, you know, inventory is piling up, days on market is increasing.
12:11New inventory is the water flowing into the bathtub,
12:14so it's how many people are deciding to list their homes.
12:17And I think that that distinction is important to make as well.
12:20So how do you view the current supply and demand balance?
12:24And is there a threshold that's indicating that it's normalized,
12:28it's healthy, it's unhealthy, what is your perspective there?
12:30I think we're moving in the right direction.
12:32And I see 2026 as being a year where we continue to sort of move in the right direction.
12:38We've been in this environment where we did see inventory increase last year,
12:43which was good news.
12:45Demand has been a little bit hesitant, right,
12:48because the payment to paycheck calculation, as I call it,
12:51just hasn't made sense for a lot of potential buyers.
12:54But right now we're starting the year with higher inventory levels than a year ago.
12:59We're seeing affordability start the year in a better spot.
13:02Mortgage rates are lower than they were a year ago.
13:05I think there's maybe a bit more certainty this year in the market.
13:10Buyers are feeling, I know consumer confidence levels are still quite low.
13:13But we're seeing mortgage applications respond to this environment.
13:18Mortgage applications are starting the year higher than year ago levels,
13:21which I think bodes well for purchase demand.
13:23What do you think is the most important factor when it comes to affordability
13:28or perhaps like perceived affordability?
13:30Like you were talking about that wages have finally increased relative to home prices.
13:36Beyond that is that rates, and I don't, when I say perceived affordability,
13:41like you were talking about recency bias, right?
13:43So if rates were to drop down to 4%, whether or not people might be jumping into something
13:47that they could still afford at 5%, right?
13:50Right.
13:50Because rates have dropped down to 4%, they're going to try to get on those lower rates.
13:55So what do you see as the most important factors, actual affordability or perceived affordability?
14:01That's a great question.
14:02And actually, as you were saying that, I thought of maybe another factor of, you know,
14:07something that I would want to explain, which is it's really hard to time the market, right?
14:12And I think it's sometimes a fool's errand to try and time the market because maybe mortgage rates dip below
14:196%,
14:19but in supply constrained markets, that decline in mortgage rates can show up in the form of higher house prices,
14:27right?
14:27So you might capture the market on one end of things, you got a lower mortgage rate,
14:32but maybe you got into a bidding war and, you know, the price of that house went up.
14:37And so it's just really difficult, I think, to time the market.
14:39So the best time to buy is really when you find a house that you like, so the inventory is
14:45sufficient,
14:46when it meets your sort of monthly payment, what you're looking for to buy from a monthly payment perspective,
14:54and it fits your lifestyle needs.
14:57And those three factors, I think, are really what would drive the decision to buy and sell a home.
15:02And so to your point about perceived or actual affordability,
15:06I do think it comes down to maybe perceived affordability sort of gets you interested,
15:11but it's actual affordability that drives the market forward.
15:14Yeah.
15:15Logan has a couple of key phrases that he tools around with, but it's basically homeowners.
15:21He just says homeowners are just different, man.
15:24Homeowners are going to home own like theirs.
15:25Yeah.
15:26They're going to get into a home if they want to.
15:28If they're ready to get into a home, they're going to get into a home.
15:29Absolutely.
15:30If your lifestyle needs are such that, you know, you want to move from renting to buying,
15:35or you need to, you just had another kid and you're sort of, you've outgrown your space,
15:40and there's a home that meets your requirements and you can afford to buy it,
15:44I think we're already starting to see those types of lifestyle decisions drive the market forward,
15:49despite the fact that we have, you know, a substantial number of homeowners that are rate-locked into their homes.
15:55You're still seeing those folks make the decision to part with a 3% mortgage rate in favor of, you
16:01know,
16:02moving on with their lives and buying a home that meets their needs.
16:05Right.
16:07So touching back on what you had said previously about timing the market or the difficulty of timing work,
16:12how should professionals think about the relationship between rates, home prices, inventory?
16:17Like what's the, either the lag time or like the feedback loop that they tend to forget or overlook?
16:24So I would say, you know, I always think about the fact that there are trade-offs here.
16:30Affordability, there's different levers.
16:31There's income, there's mortgage rates, and there's home prices.
16:36And home prices are really a function of supply and demand dynamics.
16:39So we have markets right now where inventory has sort of piled up.
16:42Florida, Texas, markets that are a little bit more builder-friendly,
16:46where, you know, when interest rates came down, builders started to pick up the pace,
16:49and then when interest rates went up, maybe there was a pullback in demand,
16:52and so you've had more inventory start to pile up.
16:55So if mortgage rates come down and these markets where active inventory has piled up,
17:00maybe you don't get as much of a price response.
17:03So prices don't increase as fast because there's plenty of supply to be absorbed.
17:08But when we look at regional dynamics, the Northeast, the Midwest, these are places where, you know,
17:14building hasn't kept pace, and so we're still seeing inventory more historically constrained.
17:19You know, I went to school in the Boston area, and that could be one area where, you know,
17:24if mortgage rates come down and you get a bunch of people off the sidelines,
17:27then maybe you start to see home prices pick up and home price growth pick up,
17:32reflecting that sort of surge in demand, not meeting insufficient supply.
17:36And so I think you've got to keep regional dynamics in mind and also keep in mind,
17:41well, is this an area that has enough supply to absorb that inflow of demand from the lower rates,
17:48or is it an area where, you know, inventory hasn't quite kept pace,
17:52and so you'll start to see house prices react.
17:55How do you recommend people begin to span the gap or that chasm between the macro and the micro?
18:02So if you're, you know, if you're an agent, if you're a loan originator,
18:05then, you know, your market is local.
18:07It's a micro market, right?
18:09And a lot of, there's a misperception, I believe, that that's, obviously, you need to know your local market
18:16because that's where all of your money is, that's where all your business is.
18:19But on the local news at night, they're not showing, there's not a segment over your regional housing market, right?
18:26People, homebuyers and potential homebuyers, they're looking at national news.
18:30They're receiving information about the macro view, not the micro.
18:34So how do you recommend that professionals begin to connect the dots?
18:40Because the divergence from local community, you know, regional divergences from one market to the other can be vast.
18:47So how do they connect those dots and then how do they, or what are some initial first steps they
18:53could do?
18:53Because I know that's a complicated answer to unpack.
18:56So what are some first steps that they could do to connect the macro to the micro
19:00and then begin to filter out that information to the homebuyer?
19:05Yeah, so there are trends that I think are more universal, right?
19:11So when we look at what the Fed's doing and what interest rates are doing, that tends to flow through
19:16to all markets.
19:18Interest rates are either going up or they're going down.
19:19And so there are some things that are relevant to everyone.
19:22But beyond that, I think there are so many great data providers out there right now, HousingWire being one,
19:27that are offering data at the hyper-local market level.
19:31And so if you know what to track, some of the things that we've already talked about looking at inventory
19:36metrics
19:37and listings data and labor market data, if you know what to track, there's a lot of data available to
19:43you
19:43and you can start to tease out like, oh, well, my market's diverging significantly from the national
19:49because the national unemployment rate has actually increased to, you know, four and a half percent.
19:53Whereas in my local market, we continue to grow and we're getting a lot of domestic net in-migration and
19:58jobs are growing.
19:59And so that has strong implications for our local housing demand.
20:03If more people are moving in, that's more demand for shelter, both rented and owned.
20:08And so I think it's utilizing a lot of those available data resources to try and understand what's happening in
20:14your local market.
20:15Because to your point, it's not always, you know, what's happening at the national isn't always particularly relevant to your
20:21market.
20:22But I'm glad we're living in a time when there's so much data available to all of us to try
20:28and understand some of these regional dynamics.
20:30I'm glad you brought that up.
20:31I've got a specific question about that.
20:32There we go.
20:33Not yet.
20:33I'm going to get to it in a second.
20:35So demographic and behavioral trends, like household formation, the shift from or to remote work.
20:42How much of that is still a major factor in the current market overall?
20:46Yeah.
20:46I mean, you cannot put that genie back in the bottle, right?
20:50We now have the ability to work remotely.
20:53And I think while you might get, and we are seeing people move back to the office and there's these
20:58hybrid environments, I really don't see us going back to a pre-pandemic world where we're all back in the
21:05office.
21:05And so I think that that has, that still impacts housing market dynamics.
21:10We did see the shift out to the suburbs in the aftermath of the pandemic.
21:15I think part of that was driven by the ability to work remotely.
21:18But I think part of that was driven by demographic trends.
21:22We were seeing that precede the pandemic.
21:24And that's really millennials aging into their prime home buying years, forming families and doing what their predecessors had done
21:31before them, which is move out to the suburbs and start their families.
21:35And so, you know, that's a trend that continues.
21:38And then Gen Z now is sort of aging into their moving to the downtown urban core, renting that.
21:46So we'll see some of that demand as well from the Gen Zers.
21:50So it's always take a step back and look at what the demographics are telling you.
21:55I certainly think that remote work is still influencing trends today.
21:59And you still see people that, you know, maybe worked in California and now there's Texas offers them relative affordability.
22:07And so they're able to move and buy a home with a little bit more land.
22:10And I still think that those dynamics are impacting our market.
22:14You explain all of these factors and the relationship between the data points really, really well and plain English.
22:23Well enough for me to be able to understand it.
22:24So how do you recommend, I mean, and I think that's a struggle for a lot of people is that
22:30they will get lost in the industry or the topic-specific jargon.
22:36And then that really gets lost on the home buyer, on the customer.
22:40How do you approach translating these things into language that's relatable and understandable?
22:45What advice would you give for someone wanting to do that?
22:48Yeah.
22:48This is something I think that as economists we've all had to learn along the way.
22:52And for me it starts with what matters to people.
22:56And in fact, sometimes I'll even, I'll be working on an analysis and I'll be really in the weeds of
23:01it.
23:01And I'll ask, I'll turn to my husband and I'll say like, what questions do you have about the housing
23:06market?
23:07Like what, you know, what matters to you?
23:08Or I'll ask a friend, like what are you curious about?
23:10What's perplexing to you?
23:12What don't you understand?
23:14But really it starts from a place of like, why does this matter to a consumer, to a broker?
23:20What does all of our research matter?
23:22And I start from that point and use that as sort of my launching pad to explain these various dynamics
23:29is really what matters to people on a day-to-day.
23:33Right.
23:34What's one misconception about housing data or economics that you wish that the industry would move past?
23:40Misconception.
23:41There's, there's quite a few, um, from a consumer standpoint, we're always trying to disrupt the myth of the 20
23:48% down payment.
23:49Oh yeah.
23:50That's always been, been a challenge for potential first time home buyers is there's this idea that, you know, you
23:55always need to put down 20% on your first home.
23:58And, um, you know, even, even a lot of my, in my own friend group, I think that that's been
24:04a challenge to overcome, that there's options for, for putting down less than, than 20%.
24:09Shopping around for a mortgage rate, that's the other, uh, that's the other one that I always think of with
24:14the consumer that, that we typically get is, is, you know, you're able to shop around for a mortgage rate.
24:19And there's been plenty of studies to show that if you do that and you put in that time and
24:22that effort, you can land with, you know, land on a much lower mortgage rate than if you just go,
24:27uh, than if you don't shop around.
24:28Um, but, but, but I generally do think that there's a big misconception on, on, on, on timing the market.
24:34There was a big push for, um, what was the phrase like marry the date, the rate, marry the house.
24:44Dairy. Yeah. Date the rate, marry the house.
24:46And, you know, a lot of misconception around like, well, it's okay.
24:49You can always refi. You can always refi.
24:51Um, traditionally that's been true.
24:53I mean, we've been in a 30 year plus declining mortgage rate environment.
24:58That's really, uh, contributed to quite a bit of turnover, right?
25:01You could buy your house in 1981 and then 18% mortgage rate.
25:06And then a couple of years later you refi, um, and then you, you get into your next house and
25:11then you refi.
25:12And that's really been a big tailwind for our industry.
25:14And I think we're, we're sort of in a new environment, um, right now.
25:19Yeah. We only got like a couple year window where that actually is relevant again.
25:22Exactly. I, I, I'm not seeing that as, as being in our, in our near term future.
25:27And so, um, I wouldn't necessarily give that advice of, of, of, well, you know, buy and then you can
25:33refi a couple years later.
25:35No, I mean, buy and make sure you're comfortable with the monthly payment that you like the house.
25:38All those things we already talked about.
25:40Um, and maybe eventually you can refi and that's great.
25:43But I wouldn't use that as, you know, as, as, as pushing the boundaries on what you can afford.
25:49Right. Uh, and so I just think we're in, we're in a different, different housing market.
25:54It's been like this when you look at mortgage rates and now I think we're sort of stabilizing at a
25:58historically normal mortgage rate.
26:01But now we need house prices and incomes to, to help bring affordability back to reasonable.
26:07What, uh, either risks or vulnerabilities in the housing market give you pause or, I don't mean to exaggerate too
26:15much, but like keep you up and are, or are concerning to you.
26:17And it can be structural, policy related, financial.
26:21There's a couple of things. I mean, we've, we've been talking a lot more about insurance, rising insurance premiums.
26:26So non-mortgage costs are something that I think about a lot because they're not just an issue to potential
26:32home buyers.
26:32They're also a problem for existing homeowners, especially those on fixed incomes, even those who have, you know, paid off
26:39their, their mortgages, right?
26:40Um, facing rising insurance premium costs, property taxes, all of these things can be, uh, financially burdensome to existing homeowners
26:49and, and potential home buyers.
26:52So I think about that a lot. Uh, I've been thinking a lot about the labor market.
26:56Uh, we started the conversation talking about how housing is at the intersection of all these different parts of our
27:02economy.
27:03And the labor market is, is one area that I'm monitoring because, you know, some of the presentations today went
27:08over this in, in great detail.
27:09But the labor market, the unemployment rate is still historically low.
27:12So on the face of it, it doesn't seem like, like things are problematic.
27:16But then when you look at the hiring rate in today's labor market, it's at about the same level as
27:21it was in 2013, which is when the unemployment rate was seven, seven percent.
27:26So there's not a ton of hiring happening. We're not firing, like we're not seeing these widespread layoffs in the
27:32labor market, but we're also not hiring.
27:34So it's frozen. And job changes are a trigger for, for home changes, for transactions, right?
27:42Um, that tend to be one of the bigger triggers for, for household moves.
27:46And so if you don't have a ton of hiring happening in, in the labor market, then that has direct
27:51implications to the, to the housing market.
27:53But also if we do start to see layoffs pick up and we don't have enough job openings and hires
27:59to absorb those layoffs, then that has broader implications as well.
28:03And we're already seeing foreclosures tick up a little bit. Uh, I, I expect that with the cooling labor market,
28:11we'll see more.
28:12I am in no way saying this on the record, looking directly at the camera, no way expecting a foreclosure
28:17wave.
28:18Um, there are pockets, I think of the country that will, will experience some more, especially in areas that, um,
28:25you know, where buyers bought at the top of the market, where, you know, those buyers put down very low
28:31down payments.
28:31I think there's a little bit more stress among those, those, um, homeowners.
28:35But generally speaking, I'm not expecting any sort of foreclosure wave because we still have pretty strong equity cushions in,
28:41in today's, uh, economy.
28:43But I am watching the labor market very closely for any signs of, of stress there.
28:47Okay. So I'm gonna, I said I was gonna mention it in a few questions and we're here.
28:51Okay.
28:52So HousingWire, we rolled out, or we're rolling out today, the HousingWire Intelligence Platform.
28:56And it's a customizable dashboard for professionals to understand, visualize, you know, what's happening both at the end.
29:01At the macro or the micro level, like we talked about, uh, a few questions ago.
29:05Mm-hmm.
29:06And so if you were to recommend a basic dashboard, uh, set up to, uh, a, a loan originator.
29:12Let's say a branch or regional manager.
29:14Okay.
29:15Uh, okay.
29:15So what three to five data points would you recommend that they include for, uh, a national dashboard, let's say,
29:21and then a local dashboard.
29:23Okay.
29:23Well.
29:24Assuming that HousingWire Intelligence has any relevant data that you could wish for.
29:29Okay.
29:30This is great.
29:31And then you'll implement all of these suggestions if it's not already there.
29:36I want to get, uh, an Odetta Cushi, you know, drop-down, like, uh, profile that people can just, you
29:41know, implement your dashboard.
29:42The Odetta Cushi dashboard.
29:44Got it.
29:44That's what I'm pushing for.
29:45Perfect.
29:45So, you know, the obvious one that, that I'm sure you'll get quite a bit of agreement on is, is
29:51inventory.
29:52Uh, you have to know what's going on with, with inventory.
29:55Uh, affordability.
29:56I think an affordability index and...
29:59Are we on the macro or the micro?
30:01I would think that this would apply to both, but that the affordability index would be hyperlocal.
30:06Okay.
30:06So it would be using, uh, local incomes, right?
30:09So instead of using the national median income, it would use the, uh, Dallas, um, median income to, to determine
30:16affordability.
30:16And that affordability index should include or even break out the three major pieces of affordability that I mentioned, which
30:23is income, interest rates, uh, and house prices.
30:27So house prices should be included both at the, at the national level and to the local level, so you
30:32know what's going on.
30:34Uh, a repeat sales index, I think, would be helpful because it, um, removes some of the noise from changing
30:41mix, right?
30:42Because a median sales price can reflect whether higher priced homes or lower priced homes are being sold.
30:47So, um, you need affordability, uh, you need inventory measured in, in some capacity.
30:53I think labor market data would be helpful.
30:55If we're thinking a one-stop shop, right?
30:57Of like, what's, what's happening in, in my, in my market?
31:01Uh, labor market information, I think, would be helpful to have there, both at the national and, and at the
31:07local level.
31:08Uh, migration data, I think, would be helpful.
31:10Well, population data, I'll say, I'll say that.
31:13Okay.
31:13So, so what's happening in terms of, and population data tends to be lagging.
31:18So if you could incorporate, um, more real time measures, and there are some data sources available out there to
31:24try and understand what's happening with inflow and outflow of, of population trends.
31:29I think that that would be incredibly useful.
31:32Um, maybe I'm thinking like an economist, like what I would want.
31:36Totally fine.
31:36In, in that data.
31:38Uh, so I think that would be important, um, and will help us understand some of the demographic drivers, um,
31:44as well.
31:45So, those things capture sort of the supply and the demand, and then the intersection of supply and demand, which
31:50is house prices and what it means for affordability.
31:53Right.
31:53I think that those would all be really helpful in, in getting a good view of, of the market.
31:57Okay.
31:58So if you were advising, uh, originator again, or branch manager, region manager, to watch for three leading indicators for
32:0626 going into 2027.
32:08Three leading indicators.
32:09What would you pick?
32:11Three leading indicators.
32:13Okay.
32:13A lot of the macro ones we track are, are quite, are quite lagging, as you know.
32:16So on the inventory front, um, I think new listings are, are an important one to measure.
32:22Uh, so how much, you know, how, how, how many people are deciding to, to, to enter the market and,
32:28and, and sell their home.
32:29I think that's a good one.
32:31Um, I do think that the house price indices are, are somewhat lagging just by the nature of how that
32:36they're determined.
32:37But I, I think that that's also an important one because it's a good sort of, um, what's happening at
32:42the intersection of, of, of supply and demand.
32:44So I think house prices are, are the other ones.
32:47So you've got the supply, um, you've got the intersection and then affordability indices.
32:51You know, we have one called the Real House Price Index that's tracking affordability using all those factors that we
32:56talked about.
32:57Uh, income interest rates and house prices at, at the, the metro level.
33:01Uh, I think that that would be another one to, to be able to talk to potential buyers like, hey,
33:07affordability, you know, despite some of the headlines is at its best level in three years.
33:11Right.
33:12And, uh, and, and new listings are starting to tick up or, you know, if that was a story in
33:17your local market and that'll give you more, more options to, to work with.
33:20Um, and, and so I think those, I would choose those ones.
33:24Yeah.
33:24So it wouldn't be a housing wire interview or a content piece in the last two years if I didn't
33:30at least bring up AI in some form or fashion.
33:33Of course.
33:33Yeah. So what is your perception? What is your view on the impact? Obviously it's going to be very important.
33:38But the way that AI and, uh, and more transparent data, how is that going to, uh, transform the way
33:45that people view and understand housing cycles over the next five years in your opinion?
33:49I mean, I think it's incredibly important. I, I think we're, we're already seeing some evidence of the fact that
33:55AI is making us more productive in the way that we can do research and the way that we can
33:59get information quicker, um, in the way that we ask and, and receive answers to, to questions.
34:05Um, so I think the, the productivity gains, there's, there's more to come, um, from that standpoint and historically productivity
34:14gains, you know, you could see some productivity led income growth broadly in the market.
34:19Uh, but, but I, I think it'll help consumers get their information faster, get more information. Um, and, and I
34:27see it as a good opportunity for our industry to, to leverage.
34:31And what is my last question for you? Uh, okay. So what, if any, uh, structural improvements or reforms would
34:38you like to see take place or do you think would be effective in creating a more healthy housing environment
34:43over the next 10 years?
34:44I, I, I, I go back to the supply side. I think that, uh, demand side solutions, it's, it's always
34:51great to see a focus on affordability. Uh, but I think we need to focus on the, the supply side
34:57of the equation a little bit more because
34:59sometimes when you boost the demand side, you see that reflected in higher house prices and, and, you know, and
35:05that can contribute to declines in affordability. So, uh, you know, focusing on making it more cheaper and faster for
35:12builders to build more homes. Um, you know, some focusing on zoning and permitting and reducing the, the sort of
35:20barriers that we see there.
35:21You know, the builders think of the five L's of factors like holding back more home building activity. Uh, and,
35:29and so that's always what I come back to is trying to tackle the supply side of the equation so
35:33we can bring more homes to the market.
35:34And with more supply on the market, you can get, um, some downward pressure on prices and I think contribute
35:41to a more affordable housing market and give people more options to choose from.
35:45Do you think that policy and zoning is probably, are those, I, I, I had a conversation earlier today and
35:50when it came to building and the supply issues, zoning and policy was, was, was brought up again.
35:57But what about, um, you know, cost of materials, labor, I mean, where, again, it's, uh, various factors at play,
36:06but in that supply, creating more homes and the supply problem, where do you see as the hierarchy of like
36:13this, these two are the most important factors?
36:15I do think that tackling zoning and, and that's, it's getting a lot more attention. It's, it, there's been a
36:20ton of progress on, on focusing, focusing on, on zoning issues, um, and, and reducing, uh,
36:27permitting times and permitting costs. So I, I think on the regulation side, that's sort of where I would focus,
36:33but certainly there's been a, a skilled labor shortage in the construction industry since the end of the global financial
36:39crisis.
36:40And so I think getting more folks into the construction industry, uh, is, is another important factor to allowing builders
36:48to, to build more homes. Material costs are, residential material costs are still over 40% higher than they were
36:54pre-pandemic.
36:55So I think that that is, you know, that's certainly, uh, a challenge as well. But, uh, it seems that
37:01from a, from a, from a policy perspective, that focusing on, on zoning and the regulation piece of, uh, of
37:08all of these construction headwinds is, is a good one.
37:11Excellent. All right. Odetta, thank you very much. It was a pleasure. Thank you for taking the time.
37:15Thanks, sir.
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