1
00:00:00,000 --> 00:00:06,000
Ever wonder what really happens behind the scenes in construction, real estate, and development?

2
00:00:06,000 --> 00:00:12,000
We pull back the curtain on the new home construction industry, the real estate market, and the trends shaping it all.

3
00:00:12,000 --> 00:00:17,000
Discover the stories, insights, and expertise behind the process of building a new home.

4
00:00:17,000 --> 00:00:22,000
Join us for Trust the Process podcast, and let's build something great together.

5
00:00:22,000 --> 00:00:27,000
Welcome back to Trust the Process, the podcast where we talk about real estate,

6
00:00:27,000 --> 00:00:32,000
new home industry, new construction, and everything in between.

7
00:00:32,000 --> 00:00:35,000
Today we're going to talk about interest rates.

8
00:00:35,000 --> 00:00:41,000
Topic that we know is, has been in front of mind for people for a couple of years now.

9
00:00:41,000 --> 00:00:46,000
We know everybody's, you hear so much about interest rates.

10
00:00:46,000 --> 00:00:47,000
It's a key hinge.

11
00:00:47,000 --> 00:00:48,000
It has been.

12
00:00:48,000 --> 00:00:54,000
And for people who maybe got great rates when they were low during COVID in those years where you could refinance,

13
00:00:54,000 --> 00:01:00,000
what they look like now, where we think they're going, some of the hindrances that have been posed to us over time.

14
00:01:00,000 --> 00:01:03,000
And I know there are a lot of people who've thought, maybe I won't buy.

15
00:01:03,000 --> 00:01:05,000
I'm going to wait until the rates drop or whatever it is.

16
00:01:05,000 --> 00:01:10,000
And so maybe some of how people are going to get off the fence with that, what it means to new home construction,

17
00:01:10,000 --> 00:01:13,000
and what it means to the end user buyer at the end of the day.

18
00:01:13,000 --> 00:01:16,000
So I'm going to let you jump into it.

19
00:01:16,000 --> 00:01:22,000
And as our resident expert, Mike is going to take a seat here and tell us all we need to know.

20
00:01:22,000 --> 00:01:28,000
I think, you know, I hesitated to even make this a topic because there's so much content out there.

21
00:01:28,000 --> 00:01:31,000
People can find everyone's take on interest rates.

22
00:01:31,000 --> 00:01:34,000
You can throw a rock and hit 10 different opinions.

23
00:01:34,000 --> 00:01:40,000
And there's no shortage of YouTubers and opinions and podcasters who use this as fodder.

24
00:01:40,000 --> 00:01:43,000
And you watch CNBC and they talk about it at least once a week.

25
00:01:43,000 --> 00:01:47,000
There's also a fair amount of people who think they know, who believe they understand it.

26
00:01:47,000 --> 00:01:52,000
Maybe don't have the full picture understanding of where it starts or how it gets to where it is.

27
00:01:52,000 --> 00:01:54,000
I think that's probably most people.

28
00:01:54,000 --> 00:01:59,000
In fact, I've talked to mortgage lenders who clearly really have a very flimsy understanding,

29
00:01:59,000 --> 00:02:03,000
shaky understanding of really mortgage rates and how they're determined.

30
00:02:03,000 --> 00:02:09,000
People think that the vast majority of Americans think the feds control the interest rates.

31
00:02:09,000 --> 00:02:11,000
And that's an narrative.

32
00:02:11,000 --> 00:02:16,000
They control what your 30-year fix is going to be.

33
00:02:16,000 --> 00:02:21,000
And oddly enough, this is very apropos because the fed met today.

34
00:02:21,000 --> 00:02:26,000
So we're in the last week of January, the fed met and decided to keep the feds funds rate.

35
00:02:26,000 --> 00:02:27,000
No changes today.

36
00:02:27,000 --> 00:02:28,000
No changes.

37
00:02:28,000 --> 00:02:30,000
But that doesn't really tell us much.

38
00:02:30,000 --> 00:02:35,000
The feds funds rate is just what banks lend money to each other overnight.

39
00:02:35,000 --> 00:02:37,000
That's why they call it the short-term rate.

40
00:02:37,000 --> 00:02:42,000
So it's, you know, I believe right now it's like basically 5.25.

41
00:02:42,000 --> 00:02:47,000
So that's just the percentage rate that I need to balance my books at the end of the night

42
00:02:47,000 --> 00:02:50,000
because banks have to balance their deposits versus their outstanding loans.

43
00:02:50,000 --> 00:02:55,000
I'm going to borrow money from a bank upstream, upstream, upstream, upstream.

44
00:02:55,000 --> 00:02:59,000
The federal reserve, you know, it goes all the way up to the feds.

45
00:02:59,000 --> 00:03:05,000
But really that kind of sets the tone because a bank, if they know they have to borrow money at the end of the night

46
00:03:05,000 --> 00:03:11,000
to balance their books and they're paying 1% for that money versus 5%,

47
00:03:11,000 --> 00:03:17,000
they're going to be more likely to loan out things that are going to be shown as debts on their books.

48
00:03:17,000 --> 00:03:18,000
That's interesting.

49
00:03:18,000 --> 00:03:19,000
Right.

50
00:03:19,000 --> 00:03:23,000
So if they have a million dollars out but only 100,000 in deposits, there's a ratio.

51
00:03:23,000 --> 00:03:26,000
I believe they can loan 10 times on deposits.

52
00:03:26,000 --> 00:03:27,000
I can't remember.

53
00:03:27,000 --> 00:03:30,000
But they can loan a certain multiplier on their deposits.

54
00:03:30,000 --> 00:03:32,000
So, uh-oh, too many people withdrew money today.

55
00:03:32,000 --> 00:03:34,000
We still have all these outstanding loans.

56
00:03:34,000 --> 00:03:40,000
We need to balance our books according to the debts versus what we have on our balance sheet.

57
00:03:40,000 --> 00:03:43,000
And we need to borrow money upstream overnight.

58
00:03:43,000 --> 00:03:46,000
That's what they call it, the overnight rate or the feds funds rate, the short term rate.

59
00:03:46,000 --> 00:03:55,000
So when they play with that, they use it as a tool to either encourage lending or discourage inflation.

60
00:03:55,000 --> 00:04:01,000
So they have that dual mandate of full employment and 2% inflation, just a random number they pulled out of nowhere.

61
00:04:01,000 --> 00:04:09,000
But they thought that that's a healthy economy, should inflate by about 2%, decreases your debt.

62
00:04:09,000 --> 00:04:14,000
I mean, really, if you have debt on the books, but your dollar is becoming worth less every year,

63
00:04:14,000 --> 00:04:17,000
but you have the same amount of debt, the debt becomes less impactful.

64
00:04:17,000 --> 00:04:20,000
So it benefits the consumer to have some inflation.

65
00:04:20,000 --> 00:04:22,000
So they want some inflation.

66
00:04:22,000 --> 00:04:32,000
And what we're seeing now after COVID, we had all that quantitative easing where the rates were basically zero or were.

67
00:04:32,000 --> 00:04:35,000
And it had upstream effects, right?

68
00:04:35,000 --> 00:04:41,000
So then you saw banks being able to balance their books with 1% money costs.

69
00:04:41,000 --> 00:04:45,000
They're really eager to loan loans at 4%, 5%.

70
00:04:45,000 --> 00:04:49,000
Because it's like printing money literally, right?

71
00:04:49,000 --> 00:04:51,000
They can balance their books.

72
00:04:51,000 --> 00:04:55,000
They can borrow money from an upstream bank, meaning a bank bigger than that or whatever.

73
00:04:55,000 --> 00:04:59,000
And why would you not have debt on your books then based off of your deposits?

74
00:04:59,000 --> 00:05:00,000
You have more debt.

75
00:05:00,000 --> 00:05:02,000
You're making 5% interest on that debt.

76
00:05:02,000 --> 00:05:06,000
To balance your books out at the end of the night, you're borrowing money at 1%.

77
00:05:06,000 --> 00:05:09,000
I've never heard this perspective.

78
00:05:09,000 --> 00:05:12,000
Yeah, it's what the feds are doing when they're setting rates.

79
00:05:12,000 --> 00:05:14,000
That's really what it is.

80
00:05:14,000 --> 00:05:17,000
Now that does have inflationary or deflationary pressures.

81
00:05:17,000 --> 00:05:23,000
You can see when they wanted this bar economic activity after the global financial crisis or during COVID.

82
00:05:23,000 --> 00:05:26,000
It's one of the quickest things they go to.

83
00:05:26,000 --> 00:05:30,000
Oh, let's go ahead and make short-term borrowing costs very cheap.

84
00:05:30,000 --> 00:05:33,000
And it trickles into long-term borrowing costs.

85
00:05:33,000 --> 00:05:35,000
Just slowly.

86
00:05:35,000 --> 00:05:41,000
Most of the long-term borrowing costs are dictated by treasury bond yields.

87
00:05:41,000 --> 00:05:46,000
So that's without getting too far down the rabbit hole on short-term rates and things like that.

88
00:05:46,000 --> 00:05:51,000
I just thought it was important to make that distinction of what it means when you hear,

89
00:05:51,000 --> 00:05:53,000
oh, the feds have lowered rates.

90
00:05:53,000 --> 00:05:57,000
Because it doesn't necessarily move anything.

91
00:05:57,000 --> 00:06:04,000
No, unless you're balancing the books at Wells Fargo, it doesn't really have a lot of basis on your life.

92
00:06:04,000 --> 00:06:07,000
Now, a lot of times credit cards are based on that.

93
00:06:07,000 --> 00:06:10,000
That would might be what we call our prime rate or our feds funds rate.

94
00:06:10,000 --> 00:06:19,000
So the prime rate, anything that's variable, you might notice that as we've seen a couple of rate decreases in 2024,

95
00:06:19,000 --> 00:06:24,000
that would maybe you'd see your credit card interest rate drop commensurate to those rate drops.

96
00:06:24,000 --> 00:06:25,000
But that's about it.

97
00:06:25,000 --> 00:06:27,000
Maybe a little bit of auto too.

98
00:06:27,000 --> 00:06:29,000
You might see it trickle into auto.

99
00:06:29,000 --> 00:06:33,000
But it is a completely different animal than the mortgage market.

100
00:06:33,000 --> 00:06:36,000
Mortgage markets are truly market-based lending.

101
00:06:36,000 --> 00:06:40,000
So those rates are determined by supply and demand for money.

102
00:06:40,000 --> 00:06:45,000
And I think of it as, okay, so you have treasury bonds.

103
00:06:45,000 --> 00:06:51,000
And a 10-year treasury bond trades at, let's say right now, they're trading at 4.5% yield.

104
00:06:51,000 --> 00:06:57,000
So the feds auction off bonds four times a year and you get paid twice a year.

105
00:06:57,000 --> 00:07:01,000
So you can buy bonds for 10 years and get paid every six months.

106
00:07:01,000 --> 00:07:04,000
And currently you're getting paid about 4.5% on your money.

107
00:07:04,000 --> 00:07:10,000
So if you bought a million dollars in 10-year treasuries, you're getting $45,000 a year.

108
00:07:10,000 --> 00:07:15,000
So if you have a bunch of money that you're managing and you want to have a really low risk investment,

109
00:07:15,000 --> 00:07:20,000
it's backed by the full faith and security of the federal government of the United States.

110
00:07:20,000 --> 00:07:24,000
And you're managing a portfolio where your job is to, let's say it's a pension fund,

111
00:07:24,000 --> 00:07:27,000
and your job is to keep enough income in there to pay pensions.

112
00:07:27,000 --> 00:07:33,000
You're going to want some high-risk stuff of 8%, 9%, maybe that's in stocks.

113
00:07:33,000 --> 00:07:35,000
And you're hoping those stocks go up.

114
00:07:35,000 --> 00:07:39,000
Maybe it's a dividend stock where you're getting paid and then you also have stock appreciation,

115
00:07:39,000 --> 00:07:41,000
but then also bonds.

116
00:07:41,000 --> 00:07:44,000
And there's also other avenues, real estate investment trusts and things like that,

117
00:07:44,000 --> 00:07:47,000
that they'll use to get money off of their money.

118
00:07:47,000 --> 00:07:51,000
But it's a great way to preserve your initial investment, almost no risk.

119
00:07:51,000 --> 00:07:55,000
And you're seeing about $45,000 for every million dollars that you put in there.

120
00:07:55,000 --> 00:07:57,000
So really mortgages are the same.

121
00:07:57,000 --> 00:08:01,000
To a funds manager, mortgages are the same product.

122
00:08:01,000 --> 00:08:07,000
It's not a guarantee, but it's a really safe, long-term cash investment

123
00:08:07,000 --> 00:08:12,000
that you can give your investors cash back every single month on their investment.

124
00:08:12,000 --> 00:08:20,000
So whether it's California Pension Fund or city pension funds or just regular mutual funds or ETFs,

125
00:08:20,000 --> 00:08:24,000
they'll put some portion of that money in there because it makes their yields look good.

126
00:08:24,000 --> 00:08:26,000
It kind of creates a floor.

127
00:08:26,000 --> 00:08:31,000
And then if they put 10% in those mortgage bonds or treasury bonds,

128
00:08:31,000 --> 00:08:35,000
they can almost count on that money, whether it's 4%, 6% or whatever,

129
00:08:35,000 --> 00:08:43,000
and then hopefully make up some more points on the front end with the other 70%, 80% of their portfolio,

130
00:08:43,000 --> 00:08:46,000
whether it be stocks or short-term corporate debt, things like that,

131
00:08:46,000 --> 00:08:51,000
that might see them yielding 10% then you kind of average everything together

132
00:08:51,000 --> 00:08:55,000
and they can say, our bond returns 7.5% per year on your money.

133
00:08:55,000 --> 00:09:02,000
So if you give us a million dollars, we'll give you $75,000 minus our expense ratio of $5,000.

134
00:09:02,000 --> 00:09:06,000
So that's kind of how they make money just by moving money around and having money invested

135
00:09:06,000 --> 00:09:08,000
and their investors are happy.

136
00:09:08,000 --> 00:09:12,000
So you're a pension fund, you have $100 million in there, it really adds up.

137
00:09:12,000 --> 00:09:15,000
Now you can pay those pensions and never touch your initial fund.

138
00:09:15,000 --> 00:09:22,000
So the long and the short of it is you have these 10-year treasury bonds that people can buy from the federal government

139
00:09:22,000 --> 00:09:26,000
and then you have mortgage-backed securities which kind of compete.

140
00:09:26,000 --> 00:09:28,000
I mean, that's why it's tied.

141
00:09:28,000 --> 00:09:34,000
If you look at where the 10-year is, you can figure about a 1.5% to 2% premium on top of that

142
00:09:34,000 --> 00:09:36,000
and that adjusts for the risk.

143
00:09:36,000 --> 00:09:41,000
Most people don't hold the mortgages for 30 years so they kind of are considered about what's the average people

144
00:09:41,000 --> 00:09:43,000
staying in the house about 7 years, I think statistically.

145
00:09:43,000 --> 00:09:45,000
So that's really a 7-year bond.

146
00:09:45,000 --> 00:09:48,000
It's not a 30-year bond, it's a 7-year bond.

147
00:09:48,000 --> 00:09:54,000
So you're getting that money back in that 7-year period and in the meantime you're making all that interest on it.

148
00:09:54,000 --> 00:09:59,000
So there is an appetite for mortgage-backed securities and that's a big reason why we had the global financial crisis

149
00:09:59,000 --> 00:10:05,000
because there was too much demand so then it was like, we've got to generate all this debt.

150
00:10:05,000 --> 00:10:07,000
We'll take anything, anyone.

151
00:10:07,000 --> 00:10:10,000
We just got to get this debt into these funds and sell them off

152
00:10:10,000 --> 00:10:15,000
and there were a lot of people that made money along the way bundling them up and reselling them

153
00:10:15,000 --> 00:10:17,000
and there's a lot of books written on that.

154
00:10:17,000 --> 00:10:22,000
There's the big short, there's tons of stuff on that so we don't need to go down that rabbit hole

155
00:10:22,000 --> 00:10:27,000
but that's kind of, if you think of really, it's a supply and demand.

156
00:10:27,000 --> 00:10:34,000
So as long as there's a limited money supply and the feds are trying to do that now since mid-2022 when we...

157
00:10:34,000 --> 00:10:36,000
Criteria is really tightened up.

158
00:10:36,000 --> 00:10:39,000
It gives that security and a few hours of safety.

159
00:10:39,000 --> 00:10:41,000
Oh, even from the global financials, which you say, right.

160
00:10:41,000 --> 00:10:42,000
Absolutely, well yes.

161
00:10:42,000 --> 00:10:46,000
Exactly, yeah, no, for sure because then we saw, oh, mortgages aren't completely risk-free.

162
00:10:46,000 --> 00:10:48,000
Now it's loosening a little.

163
00:10:48,000 --> 00:10:51,000
Right, yeah, it's kind of helping to find a good equilibrium

164
00:10:51,000 --> 00:10:56,000
and that's really how, it's a market-based thing.

165
00:10:56,000 --> 00:10:58,000
Where's the appetite for debt?

166
00:10:58,000 --> 00:11:02,000
So if there's not appetite for debt, then you see your mortgage rates go up

167
00:11:02,000 --> 00:11:07,000
and if 10-year treasury bonds are an indicator of where people think inflation is.

168
00:11:07,000 --> 00:11:15,000
So if inflation, let's put it this way, if inflation is 25%, which I believe we touched that in 2021,

169
00:11:15,000 --> 00:11:17,000
your money is rotting.

170
00:11:17,000 --> 00:11:22,000
So if you have money and a 10-year treasury bond that's making you 4% a year

171
00:11:22,000 --> 00:11:26,000
but it's inflation rates 25% a year, no one's buying bonds

172
00:11:26,000 --> 00:11:28,000
and when no one buys bonds, the yields go up.

173
00:11:28,000 --> 00:11:31,000
So let's pretend back then when those inflation numbers first came out,

174
00:11:31,000 --> 00:11:36,000
even if the feds had done nothing to raise rates, the market would have forced rates up

175
00:11:36,000 --> 00:11:38,000
because there would have been no appetite.

176
00:11:38,000 --> 00:11:42,000
Who was going to invest in mortgage-backed securities that are returning at 3.5%?

177
00:11:42,000 --> 00:11:44,000
I have a 3.5% mortgage rate.

178
00:11:44,000 --> 00:11:45,000
Well, that's great.

179
00:11:45,000 --> 00:11:49,000
But no one wants that debt when inflation is 20%.

180
00:11:49,000 --> 00:11:53,000
Now, obviously that's cool, but that's why these inflation numbers are so important.

181
00:11:53,000 --> 00:11:57,000
So when inflation is at 2%, people can justify putting their money into an investment

182
00:11:57,000 --> 00:12:03,000
that's yielding them 4.5% to 5% because in the case of beating inflation and returning 3%.

183
00:12:03,000 --> 00:12:05,000
I can't just let it sit in the bank.

184
00:12:05,000 --> 00:12:08,000
So that's kind of how it equalizes.

185
00:12:08,000 --> 00:12:14,000
I think of it as if we were at this table and I was one person and I needed $1,000

186
00:12:14,000 --> 00:12:19,000
and somebody came to me and said, I'll give you $1,000, but give me $1,200 next month.

187
00:12:19,000 --> 00:12:21,000
Pay me back my $1,000 plus $200.

188
00:12:21,000 --> 00:12:24,000
And I would say, well, I really need the $1,000.

189
00:12:24,000 --> 00:12:29,000
And then someone else comes around the corner, I hear you're giving him $200 for $1,000 for a month.

190
00:12:29,000 --> 00:12:30,000
I'll give you $1,000.

191
00:12:30,000 --> 00:12:34,000
Give me $100 in one month and then now suddenly I have options.

192
00:12:34,000 --> 00:12:37,000
And then someone comes around the corner, I'll give you $1,025.

193
00:12:37,000 --> 00:12:42,000
I'll give it to those terms so you can see because this guy is going to have $1,000 either way

194
00:12:42,000 --> 00:12:44,000
and he's not going to make any money off of that.

195
00:12:44,000 --> 00:12:46,000
So he's like, well, shoot, I'll take $25.

196
00:12:46,000 --> 00:12:48,000
I'm not going to use that $1,000 in the next month anyway.

197
00:12:48,000 --> 00:12:54,000
Change a month to 30 years or 10 years or seven years and change $1,000 to a $500,000 mortgage

198
00:12:54,000 --> 00:12:56,000
and change the... you see how that's kind of the math.

199
00:12:56,000 --> 00:13:01,000
So when there are more people with more money, if there's more money in the house circulating

200
00:13:01,000 --> 00:13:04,000
and I'm the one that needs it, I'm going to get much better terms.

201
00:13:04,000 --> 00:13:08,000
Now let's pretend the rolls are flipped and there's 10 of us here asking for money

202
00:13:08,000 --> 00:13:14,000
and five people circulating and they're saying, well, I have $1,000 and all 10 of these people want it.

203
00:13:14,000 --> 00:13:19,000
So who's going to pay me the best return and then they kind of play musical chairs

204
00:13:19,000 --> 00:13:23,000
until there's a market that's established.

205
00:13:23,000 --> 00:13:27,000
So this person has a great job and you feel like they're going to repay the debt.

206
00:13:27,000 --> 00:13:30,000
This person's already borrowed money from you and repaid it.

207
00:13:30,000 --> 00:13:34,000
So they're going to give you $100 instead of $200, but you know you're going to get that $100

208
00:13:34,000 --> 00:13:35,000
and you're not going to have to chase them down for it.

209
00:13:35,000 --> 00:13:40,000
This person has the ability to pay. This person at the tail end of the table has no job,

210
00:13:40,000 --> 00:13:43,000
is new to the house, has never repaid debt with you.

211
00:13:43,000 --> 00:13:46,000
What kind of risk scale are you going to give?

212
00:13:46,000 --> 00:13:50,000
So that's kind of how the bond market works because really when you're buying a bond,

213
00:13:50,000 --> 00:13:53,000
you're buying U.S. debt because it's the U.S.

214
00:13:53,000 --> 00:13:55,000
It's the treasury that's going to give you that yield.

215
00:13:55,000 --> 00:14:00,000
So when the U.S. sees a drop in its credit, you know, if you remember in 2008 and 2009,

216
00:14:00,000 --> 00:14:02,000
there was a risk that we were going to lose.

217
00:14:02,000 --> 00:14:05,000
We went from AAA to AA as a country.

218
00:14:05,000 --> 00:14:10,000
So if we lost our credit rating as a country, now our treasury yields got to go through the roof

219
00:14:10,000 --> 00:14:13,000
because there's less appetite because by the way, it's not just Americans that buy treasury bonds.

220
00:14:13,000 --> 00:14:16,000
People in other countries will buy U.S. treasury bonds.

221
00:14:16,000 --> 00:14:20,000
It's a good way to get your money into the U.S. circulation and you'll buy them.

222
00:14:20,000 --> 00:14:25,000
And then as a side note, when they, you know, on the topic of people who buy bonds,

223
00:14:25,000 --> 00:14:28,000
the federal, the government can buy bonds as well.

224
00:14:28,000 --> 00:14:31,000
They'll buy bonds off of banks at face value plus a little premium

225
00:14:31,000 --> 00:14:36,000
if they want to get money back into the supply to say, okay, banks, you're not loaning enough.

226
00:14:36,000 --> 00:14:42,000
You need to loan more money and we're going to do that by buying bonds and that's quantitative easing.

227
00:14:42,000 --> 00:14:49,000
That's that along with lowering the feds funds rate is a way that the federal reserve and federal, you know,

228
00:14:49,000 --> 00:14:52,000
the feds can stimulate the economy.

229
00:14:52,000 --> 00:14:56,000
Get people to buy more and it does it trickles over into goods and everything.

230
00:14:56,000 --> 00:14:57,000
Yeah.

231
00:14:57,000 --> 00:14:58,000
Because it affects credit cards.

232
00:14:58,000 --> 00:15:00,000
It affects, I mean, terms on your TV.

233
00:15:00,000 --> 00:15:03,000
You buy it with financing, your car, your house, everything.

234
00:15:03,000 --> 00:15:10,000
So homes are, home financing is a really fragmented business.

235
00:15:10,000 --> 00:15:13,000
It's not going to Best Buy and one of the open up Best Buy credit card.

236
00:15:13,000 --> 00:15:18,000
They're getting a separate line or a bank is underwriting them and these are their terms and that's it.

237
00:15:18,000 --> 00:15:21,000
It doesn't matter how many people want to come in and buy TVs that week.

238
00:15:21,000 --> 00:15:28,000
But if you're trying to get your head around the mortgage interest market and also the housing market

239
00:15:28,000 --> 00:15:33,000
and you're trying to time those perfectly, best of luck because I've never been able to do that.

240
00:15:33,000 --> 00:15:35,000
Where would you say we are right now?

241
00:15:35,000 --> 00:15:39,000
So are there more people looking for or offering?

242
00:15:39,000 --> 00:15:50,000
There's definitely still a lot of money in the money supply and I think that I think that's the crux of what's keeping rates from being 10, 11% that we saw in the 80s.

243
00:15:50,000 --> 00:15:53,000
Got it to what, 17, 18%.

244
00:15:53,000 --> 00:15:56,000
There's just a lot more money in circulation now.

245
00:15:56,000 --> 00:15:58,000
There's a lot of funds.

246
00:15:58,000 --> 00:16:00,000
There's a lot of wealth.

247
00:16:00,000 --> 00:16:07,000
There's trillions of dollars worth of private equity out there and pension funds that need to invest in places.

248
00:16:07,000 --> 00:16:13,000
And our stock market has been performing really, really well even post COVID.

249
00:16:13,000 --> 00:16:18,000
So there's, you're also competing with a stock market that's returning some great returns.

250
00:16:18,000 --> 00:16:33,000
And why would you invest in a 10 year treasury bond at 4% every year when you could invest in one of the magnificent seven or a tech stock that's returning 20% on its face value every year.

251
00:16:33,000 --> 00:16:38,000
So there's a lot of competition for money, but there's a lot of money out there.

252
00:16:38,000 --> 00:16:50,000
So it's, I think as soon as we see inflation stabilize, which we have, I think we just had a lot of unknown, you know, a lot of uncertainty with changes of administrations.

253
00:16:50,000 --> 00:16:56,000
And I think people were nervous as to, okay, what are they knock on effects that we're going to see?

254
00:16:56,000 --> 00:17:05,000
And I'm going to cool it on buying bonds because if we have a lot of tariffs when I see inflation, and if we see inflation, my bonds are crap.

255
00:17:05,000 --> 00:17:13,000
So I think that's kept bonds really propped up, which is why we've seen the feds lowering rates now for about four or five months.

256
00:17:13,000 --> 00:17:19,000
And mortgage rates have gone up in that time period, not a lot, but they certainly have not gone down.

257
00:17:19,000 --> 00:17:26,000
So there's just no one that can put their thumb on the scale to bring rates down, mortgage rates.

258
00:17:26,000 --> 00:17:31,000
So it's just a matter of where's the demand and where's the appetite for that debt.

259
00:17:31,000 --> 00:17:36,000
I think that's one of the misconceptions is that those two things are operating together and they're not.

260
00:17:36,000 --> 00:17:37,000
They're not.

261
00:17:37,000 --> 00:17:38,000
Yeah.

262
00:17:38,000 --> 00:17:49,000
So having understanding that they're independently moving based on what the feds say and less about what the feds say in the housing market, more about the opportunities that are available to lend on.

263
00:17:49,000 --> 00:17:50,000
Exactly.

264
00:17:50,000 --> 00:18:00,000
And another thing to remember, since they are so tied to inflation, if they sometimes actually, I remember a couple of times in 2022, we would see rates come down because the fed raised rates.

265
00:18:00,000 --> 00:18:10,000
We would see the mortgage market get better because the feds were aggressively raising rates, which gave investors the hope that, oh, we are going to get inflation under control.

266
00:18:10,000 --> 00:18:20,000
So sometimes raising the short term rate will actually lower the mortgage rate, the prevailing wins for the mortgage industry.

267
00:18:20,000 --> 00:18:22,000
So it's a really interesting, I love it.

268
00:18:22,000 --> 00:18:24,000
I think it's fascinating.

269
00:18:24,000 --> 00:18:27,000
I mean, I'm waiting to bring up a historical reference.

270
00:18:27,000 --> 00:18:28,000
I'm just dying.

271
00:18:28,000 --> 00:18:29,000
I know you've got one in there.

272
00:18:29,000 --> 00:18:30,000
I will.

273
00:18:30,000 --> 00:18:32,000
We'll spread out the Great Depression bubble.

274
00:18:32,000 --> 00:18:34,000
We'll let that one rest.

275
00:18:34,000 --> 00:18:53,000
But which, by the way, I'm going to bring it up, which, by the way, was at that time, if you look at like the writings of Milton Friedman and stuff, great economist, they did a post mortem on it in the 50s, I want to say.

276
00:18:53,000 --> 00:19:05,000
And when they looked at bank ledgers and they just looked at the overall money in circulation, this sounds like the most obvious on the nose thing, but the amount of money in circulation plummeted during the depression.

277
00:19:05,000 --> 00:19:08,000
So everyone was just borrowing less.

278
00:19:08,000 --> 00:19:09,000
They were loaning less.

279
00:19:09,000 --> 00:19:11,000
They were transacting less.

280
00:19:11,000 --> 00:19:20,000
And it became this kind of game of chicken that, OK, well, I can get an employee now for my factory for half of what I was paying a year ago.

281
00:19:20,000 --> 00:19:24,000
But do I want to do a bunch of hiring? Because what if there's no one to buy my goods?

282
00:19:24,000 --> 00:19:27,000
Then it becomes a cycle and then no one buys goods because they don't have job security.

283
00:19:27,000 --> 00:19:29,000
And then it just kind of spiraled like that.

284
00:19:29,000 --> 00:19:31,000
So the feds are trying to avoid that.

285
00:19:31,000 --> 00:19:34,000
Really, that's their mandate is don't let that happen again.

286
00:19:34,000 --> 00:19:36,000
So increased money supply when needed.

287
00:19:36,000 --> 00:19:40,000
Because there's a lot of reasons you could say that we had the Great Depression.

288
00:19:40,000 --> 00:19:46,000
It didn't necessarily have to be a money supply issue because it's not like we took any money out of circulation.

289
00:19:46,000 --> 00:19:50,000
It just at the time when people were hoarding it, we should have been dumping money into it.

290
00:19:50,000 --> 00:19:55,000
Because actually that was one of the few times in our history that we've ever seen deflation.

291
00:19:55,000 --> 00:19:58,000
Because the worst thing, what's worse than hyperinflation is hyperdeflation.

292
00:19:58,000 --> 00:20:00,000
All your assets are worth nothing.

293
00:20:00,000 --> 00:20:06,000
If you're selling, when you're a manufacturing economy, which we even more so were back then,

294
00:20:06,000 --> 00:20:12,000
all the goods that you've produced that are in your inventory are now worth half or a quarter what you thought they were.

295
00:20:12,000 --> 00:20:14,000
That's devastating.

296
00:20:14,000 --> 00:20:19,000
If you're running the government, you'd rather have the opposite problem.

297
00:20:19,000 --> 00:20:21,000
You don't want that either, but you'd rather have the opposite problem.

298
00:20:21,000 --> 00:20:23,000
But you don't want to have this deflation.

299
00:20:23,000 --> 00:20:28,000
So when we saw a lot of quantitative easing in COVID, it was to prevent a deflation.

300
00:20:28,000 --> 00:20:30,000
Oh, suddenly people are not going to eat.

301
00:20:30,000 --> 00:20:32,000
How anymore? People are not going to go to the movies anymore?

302
00:20:32,000 --> 00:20:34,000
People, are they going to buy cars anymore?

303
00:20:34,000 --> 00:20:35,000
Are they going to buy houses?

304
00:20:35,000 --> 00:20:36,000
Are they going to do?

305
00:20:36,000 --> 00:20:40,000
We have to spur the economy so that we can ensure they keep doing these things.

306
00:20:40,000 --> 00:20:43,000
So let's increase the money supply.

307
00:20:43,000 --> 00:20:45,000
That's kind of how they do it.

308
00:20:45,000 --> 00:20:47,000
And then too much of a good thing.

309
00:20:47,000 --> 00:20:50,000
We had too much dessert and then we had a cake hanging over.

310
00:20:50,000 --> 00:20:53,000
And all this money and our money supply was, whoa, okay.

311
00:20:53,000 --> 00:20:57,000
And that's a whole different, you know, economists will write books about that too, I think.

312
00:20:57,000 --> 00:21:00,000
Yeah, and it's taken some time for that to absorb.

313
00:21:00,000 --> 00:21:01,000
Kind of work its way through.

314
00:21:01,000 --> 00:21:02,000
There was a lot of fluidity in that.

315
00:21:02,000 --> 00:21:03,000
100%.

316
00:21:03,000 --> 00:21:11,000
And it affected everything, obviously the housing market, but across all goods and services, it was definitely an overlay.

317
00:21:11,000 --> 00:21:17,000
When you look at 70% of homes are purchased with mortgages, the borrowing costs are such a hinge.

318
00:21:17,000 --> 00:21:22,000
It's such a hot topic that it really is the market.

319
00:21:22,000 --> 00:21:23,000
It really is.

320
00:21:23,000 --> 00:21:33,000
And I think what we saw has helped to save the real estate or prevent some sort of freefall and rates shut up is that housing is a great hedge against inflation.

321
00:21:33,000 --> 00:21:42,000
So we saw a lot of investors rushing into housing because homes in general follow inflation.

322
00:21:42,000 --> 00:21:49,000
If you look at our appreciation curves in real estate and our inflation curves, they're really eerily tied to each other.

323
00:21:49,000 --> 00:21:50,000
Yeah.

324
00:21:50,000 --> 00:21:56,000
So when you look at that, it kind of helped create a backstop in the housing market.

325
00:21:56,000 --> 00:22:03,000
So the average consumer kind of got squeezed out because the borrowing cost became astronomically high overnight.

326
00:22:03,000 --> 00:22:08,000
But then the amount of cash buyers kind of compensated for that from the appetite.

327
00:22:08,000 --> 00:22:09,000
And it's not just the big hedge funds.

328
00:22:09,000 --> 00:22:11,000
It's mom and pop investors too.

329
00:22:11,000 --> 00:22:23,000
If they're sitting on a million dollars and they say, well, I want to diversify one and I move 400,000 of that over to a single family home and put some money in the real estate market kind of prevents a deflation.

330
00:22:23,000 --> 00:22:24,000
A lot of factors.

331
00:22:24,000 --> 00:22:25,000
It is.

332
00:22:25,000 --> 00:22:26,000
It is.

333
00:22:26,000 --> 00:22:27,000
And interesting too.

334
00:22:27,000 --> 00:22:35,000
I mean, like I said, I think a lot of people, I myself being one of them, I didn't realize how closely tied the mortgage back securities were to that inflationary rate.

335
00:22:35,000 --> 00:22:36,000
Right.

336
00:22:36,000 --> 00:22:43,000
Both the relationship that they have together, but then that opposing, you know, that inverse relationship of how they affect each other.

337
00:22:43,000 --> 00:22:44,000
Exactly.

338
00:22:44,000 --> 00:22:46,000
So yeah, I feel like you just barely touched on the topic.

339
00:22:46,000 --> 00:22:50,000
Yeah, you could, you can go down and you could get into yield curves and stuff.

340
00:22:50,000 --> 00:22:51,000
But if we just tied to mortgage.

341
00:22:51,000 --> 00:22:54,000
Big pieces that helped to fit into a puzzle level.

342
00:22:54,000 --> 00:22:55,000
That's right.

343
00:22:55,000 --> 00:22:57,000
Create the story for how we understand it better.

344
00:22:57,000 --> 00:22:58,000
100%.

345
00:22:58,000 --> 00:23:05,000
The best way if I could just, you know, if someone asked me to describe it as a friend is just think of it as it is a supply and demand.

346
00:23:05,000 --> 00:23:06,000
And that's it.

347
00:23:06,000 --> 00:23:07,000
No one dictates it.

348
00:23:07,000 --> 00:23:11,000
It's how much how ready willing and able of someone to loan you money.

349
00:23:11,000 --> 00:23:17,000
And a mortgage lender kind of works as an intermediary and they'll wholesale those and sell them off.

350
00:23:17,000 --> 00:23:20,000
So if they find that the demand for their product.

351
00:23:20,000 --> 00:23:26,000
Cause they are, they're in a really tough spot because they're writing, you know, the good funding commitment at 7%.

352
00:23:26,000 --> 00:23:28,000
I get all this money at 7%.

353
00:23:28,000 --> 00:23:29,000
Right.

354
00:23:29,000 --> 00:23:30,000
Okay.

355
00:23:30,000 --> 00:23:31,000
We can write a bunch of loans at 7%.

356
00:23:31,000 --> 00:23:34,000
Now they're going to maybe write them at seven and eight or seven just to hedge it a little bit.

357
00:23:34,000 --> 00:23:43,000
But when the market's in the opposite of a free fall when it's kind of falling upwards, really precarious to try to write all that mortgage money out.

358
00:23:43,000 --> 00:23:45,000
Millions of dollars even through a local branch.

359
00:23:45,000 --> 00:23:48,000
So which is why you shop the loan.

360
00:23:48,000 --> 00:23:49,000
Right.

361
00:23:49,000 --> 00:23:50,000
Cause you never know.

362
00:23:50,000 --> 00:23:51,000
You never know.

363
00:23:51,000 --> 00:23:52,000
You never know.

364
00:23:52,000 --> 00:23:53,000
Why different lenders are able to offer different.

365
00:23:53,000 --> 00:23:54,000
Slightly different.

366
00:23:54,000 --> 00:23:55,000
Exactly.

367
00:23:55,000 --> 00:24:00,000
They follow the mortgage market, but they, there could always be this kind of slight quarter point, eighth of a point.

368
00:24:00,000 --> 00:24:01,000
Right.

369
00:24:01,000 --> 00:24:13,000
Plus a mortgage lender gets paid on the rate that they sell you in addition to their, cause if they, if the, if the prevailing rate seven and they get, they write your loan at seven and an eight, they're going to make that eighth.

370
00:24:13,000 --> 00:24:17,000
They're going to get, they're going to get a premium on that coupon as you'd call it.

371
00:24:17,000 --> 00:24:18,000
Okay.

372
00:24:18,000 --> 00:24:20,000
And then that, that investor will pay a slightly higher premium.

373
00:24:20,000 --> 00:24:24,000
Now, if you go too high, then that's actually a refi risk.

374
00:24:24,000 --> 00:24:26,000
So the value kind of starts to flat line.

375
00:24:26,000 --> 00:24:33,000
Cause they say, well, I don't want this, I don't want this in my portfolio because they're prevailing rate right now seven and you suckered them into a seven and a half.

376
00:24:33,000 --> 00:24:40,000
They're going to get wise in three to five months and know that I'm going to refi and I'm going to lose that in my, in my servicing.

377
00:24:40,000 --> 00:24:41,000
So it's a fine line too.

378
00:24:41,000 --> 00:24:46,000
And that's why if you need help with closing costs, sometimes they'll sell you a higher rate and pass that money on to you.

379
00:24:46,000 --> 00:24:54,000
Cause they know they're going to sell it at a premium, but even that starts to hit its, hit its cap to say, okay, we want to give you 5,000 in lender credits.

380
00:24:54,000 --> 00:25:01,000
We're going to write this loan at a higher rate, but then the end, and buyer of that mortgage product is saying, oh, wait a minute.

381
00:25:01,000 --> 00:25:03,000
Why is this loan an outlier?

382
00:25:03,000 --> 00:25:05,000
This is a high refi risk.

383
00:25:05,000 --> 00:25:07,000
They got their lender credit six months later.

384
00:25:07,000 --> 00:25:09,000
They're going to refi and be out of this.

385
00:25:09,000 --> 00:25:15,000
So I'm not going to give you too much of a premium for this higher debt because I'm not going to, I might only see six months worth of payments on it.

386
00:25:15,000 --> 00:25:20,000
And that's especially reflective in big builders when they pay for a commitment up front.

387
00:25:20,000 --> 00:25:22,000
And so now they're already locked into that rate.

388
00:25:22,000 --> 00:25:23,000
Yes.

389
00:25:23,000 --> 00:25:29,000
Regardless of what they, what happens between then and when all of that commitment has been sold out to the homes that they're putting off the market.

390
00:25:29,000 --> 00:25:31,000
That's a great way to dovetail and into building.

391
00:25:31,000 --> 00:25:33,000
The opposite is true too.

392
00:25:33,000 --> 00:25:42,000
So instead of a higher rate that gives the credit to the buyer, a builder, you know, new home construction has a lot more margin than a seller normally.

393
00:25:42,000 --> 00:25:46,000
Or a builder has a lot more appetite to get rid of that inventory than a seller.

394
00:25:46,000 --> 00:25:54,000
If that's their one home, they're going to say, well, the market's the market and I'm going to get out of it when I get out of it with today's rates and today's marketplace and today's buyer pool.

395
00:25:54,000 --> 00:25:59,000
But a builder has 50 of those homes to unload and they're going to say, well, let me buy a forward commitment.

396
00:25:59,000 --> 00:26:09,000
I'll spend $100,000 to get $10 million worth of mortgage money at a one point discount or something along those lines and buy that forward commitment.

397
00:26:09,000 --> 00:26:11,000
And then I say, if you threw that and sell off their homes.

398
00:26:11,000 --> 00:26:12,000
Exactly.

399
00:26:12,000 --> 00:26:21,000
And that's the way that when you're buying new construction, that builder has a lot more incentive and wiggle room to do so.

400
00:26:21,000 --> 00:26:26,000
And a lot of times a builder is setting their own comps so they can work it into the price of the home.

401
00:26:26,000 --> 00:26:33,000
But since they're setting the neighborhood or at least setting kind of the market in that area, I had to do it in 2023.

402
00:26:33,000 --> 00:26:38,000
I had to spend $54,000 on a commitment to get a buyer into.

403
00:26:38,000 --> 00:26:41,000
There's an inventory that I really wanted to sell.

404
00:26:41,000 --> 00:26:58,000
And during the rate, you know, when we had rates went up to 8.1 in the course of our escrow and they hadn't locked and the only way they could get it done was it just, it was a point where I had to make that decision and say, I'll spend the 54,000 because it's huge loan amount.

405
00:26:58,000 --> 00:27:05,000
Is it's better than me putting the house back on the market and then taking a small price reduction here, a lower offer here and by the before you know it.

406
00:27:05,000 --> 00:27:07,000
And that 54 would have eaten itself up just to move in.

407
00:27:07,000 --> 00:27:11,000
Two more months of holding cost and then maybe it doesn't sell for what it was going to sell for.

408
00:27:11,000 --> 00:27:13,000
So I just made that decision.

409
00:27:13,000 --> 00:27:14,000
But I had the margin in it.

410
00:27:14,000 --> 00:27:22,000
If it was a primary residence and maybe I owed 2.2 million and they wanted it to, you know, it would be, I'd have a lot less wiggle room in it.

411
00:27:22,000 --> 00:27:27,000
So it's just something that you do kind of build into every, every deal that you're working on.

412
00:27:27,000 --> 00:27:30,000
Just say, okay, we got to leave a little bit of room for concession.

413
00:27:30,000 --> 00:27:35,000
I usually do a blanket 2% just across the board.

414
00:27:35,000 --> 00:27:41,000
I think this is 2.5 million dollar home and I leave $50,000 just in either construction overages, concessions.

415
00:27:41,000 --> 00:27:44,000
And I'll probably eat through that at some point.

416
00:27:44,000 --> 00:27:46,000
A little bit of all right.

417
00:27:46,000 --> 00:27:47,000
A little bit of everything.

418
00:27:47,000 --> 00:27:48,000
Yeah, yeah, wherever you need it.

419
00:27:48,000 --> 00:27:50,000
Yeah, 1000 or 10,000 here just.

420
00:27:50,000 --> 00:27:53,000
And we never dial our budgets spot on either.

421
00:27:53,000 --> 00:27:57,000
But so sometimes you're lower here so you can move more money into that pile too.

422
00:27:57,000 --> 00:28:01,000
And then have a little bit more flexibility when the time comes.

423
00:28:01,000 --> 00:28:03,000
So there's a lot to it.

424
00:28:03,000 --> 00:28:04,000
There is a lot to it.

425
00:28:04,000 --> 00:28:14,000
And so guys, when you think about how challenging it is to time the interest rate market to time the housing market to time your life to time your finances.

426
00:28:14,000 --> 00:28:16,000
It's a miracle any home cell.

427
00:28:16,000 --> 00:28:18,000
It's crazy when you really think about it.

428
00:28:18,000 --> 00:28:30,000
And when you, you know, that, that because I guess because it's just such a trigger point for people that number has really indicated what the housing market has done in recent years.

429
00:28:30,000 --> 00:28:34,000
Now that we're kind of getting to a point where we can sort of settle a little bit into what it is today.

430
00:28:34,000 --> 00:28:40,000
What we anticipate it being is probably not going to drop significantly, probably not going to jump significantly.

431
00:28:40,000 --> 00:28:43,000
If our crystal ball were working, we would know that for 2025.

432
00:28:43,000 --> 00:28:50,000
But that's what we anticipate or what we, you know, what all the analysts and what the historical data.

433
00:28:50,000 --> 00:28:53,000
If we look at where it's, where is the momentum?

434
00:28:53,000 --> 00:28:57,000
The momentum is that rates are going to even out, which they kind of already have.

435
00:28:57,000 --> 00:29:09,000
And now that we're kind of to that point, we can look at that sort of where we were and how we, how, how that has affected the housing industry and how we can sort of gel into what's going to be moving forward.

436
00:29:09,000 --> 00:29:18,000
Right. And it's when the economy is good, really hard to have low interest rates on 30 or fixed or 15 year, any mortgage product, very hard.

437
00:29:18,000 --> 00:29:20,000
Because you're competing with the stock market.

438
00:29:20,000 --> 00:29:23,000
You're competing with the Fed trying to make sure that economy doesn't overheat.

439
00:29:23,000 --> 00:29:27,000
You're competing with a lot of people that are gainfully employed looking for mortgage money.

440
00:29:27,000 --> 00:29:31,000
It's just, it's like having your cake and eating too.

441
00:29:31,000 --> 00:29:44,000
To have a record low unemployment, which we have, to have a growing economy by GDP, to have a great stock market and then to also expect 5%, 4% interest rates is just pie in the sky.

442
00:29:44,000 --> 00:29:47,000
So that's what a lot of people are hoping for.

443
00:29:47,000 --> 00:29:51,000
A lot of people have been, you know, jaded about with interest rates.

444
00:29:51,000 --> 00:30:00,000
Agreed. And what we forget is that when rates were 2.5%, 3%, you could take a bath in the Bellagio Fountains because the strip was closed down.

445
00:30:00,000 --> 00:30:03,000
There was a lot of fear still. Right. We forget the fear.

446
00:30:03,000 --> 00:30:04,000
Yeah.

447
00:30:04,000 --> 00:30:06,000
It's, you only remember the good part.

448
00:30:06,000 --> 00:30:09,000
Oh, you could get a, you get a house for 350 and a mortgage rate for 3%.

449
00:30:09,000 --> 00:30:10,000
Right.

450
00:30:10,000 --> 00:30:20,000
Well, you had to have the stones to pull the trigger when all your friends are getting laid off and they're saying that the city might not open for another three months or airports or, you know, sparse and no one's coming.

451
00:30:20,000 --> 00:30:24,000
It's scary. You know, it's easy to hide in hindsight.

452
00:30:24,000 --> 00:30:30,000
And now that we've passed that through that, those people that did jump or did take that risk at the time, obviously paid off. They did well.

453
00:30:30,000 --> 00:30:34,000
But at the time was, it was a decision by winners.

454
00:30:34,000 --> 00:30:40,000
Right. So those are the ones we hear about, right? Not the people that did sign on that loan and then they ended up losing their job.

455
00:30:40,000 --> 00:30:41,000
Right.

456
00:30:41,000 --> 00:30:45,000
You know, looked at it a hundred times and never quite pulled the trigger and now they're kicking themselves.

457
00:30:45,000 --> 00:30:46,000
Oh, yeah.

458
00:30:46,000 --> 00:30:56,000
And then when you're out there, there's a lot of them still that haven't even been able to get into the home buying game because they didn't pull the trigger then and then they went through, you know, 23, 24 with maybe it's going to drop again.

459
00:30:56,000 --> 00:30:59,000
Maybe, you know, now, maybe they'll get back into the market in 25.

460
00:30:59,000 --> 00:31:00,000
Yeah.

461
00:31:00,000 --> 00:31:03,000
As we, you know, that, we've talked before about some of that.

462
00:31:03,000 --> 00:31:05,000
Yeah, we've had a lot of content on that.

463
00:31:05,000 --> 00:31:08,000
And you know, if we can see some pressure relief somewhere.

464
00:31:08,000 --> 00:31:14,000
But a lot of times people have to be careful what they wish for because if you're wishing for a 3%, right?

465
00:31:14,000 --> 00:31:17,000
And then suddenly you might find yourself really nervous at your job.

466
00:31:17,000 --> 00:31:19,000
Oh, they're talking about layoffs.

467
00:31:19,000 --> 00:31:21,000
Oh, they're talking about, oh, I would have bought.

468
00:31:21,000 --> 00:31:25,000
So they just don't realize how a lot of things do move and lockstep together.

469
00:31:25,000 --> 00:31:36,000
So if you feel really confident about your any potential and your job and your little 401k that you've been putting into since you were 21 and now you're 31 has been going up and up and up and up and.

470
00:31:36,000 --> 00:31:40,000
Oh, if I only had that, yeah, it's hard to get it all at once.

471
00:31:40,000 --> 00:31:41,000
If only, right?

472
00:31:41,000 --> 00:31:42,000
If only, yeah.

473
00:31:42,000 --> 00:31:45,000
Good. Well, good conversation. Appreciate the backstory and the help.

474
00:31:45,000 --> 00:31:47,000
I hope we didn't lose anyone.

475
00:31:47,000 --> 00:31:51,000
I don't know. And if you did, you did, but I think it's it's interesting and relevant information.

476
00:31:51,000 --> 00:31:53,000
So glad you broke it down.

477
00:31:53,000 --> 00:31:54,000
I certainly learned a lot.

478
00:31:54,000 --> 00:31:55,000
Hope you guys did too.

479
00:31:55,000 --> 00:31:59,000
Glad you were here to join us and we'll hope to see you on the next episode.

480
00:31:59,000 --> 00:32:02,000
Thanks so much for joining us on Trust for Process.

481
00:32:02,000 --> 00:32:03,000
Bye bye.

482
00:32:03,000 --> 00:32:06,000
Thanks for tuning into the Trust for Process podcast.

483
00:32:06,000 --> 00:32:13,000
Make sure to follow us on Spotify to stay in the loop with the latest insights, project updates and everything in between.

484
00:32:13,000 --> 00:32:37,000
See you next time.