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‘Perfect storm’ brewing in the family housing market - YouTube
Channel: Fox Business
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new data from freddie mac shows the
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critical 30-year fixed-rate mortgage
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most popular mortgage in this country uh
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has paused its recent steady climb
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falling to 5.7 percent for the week
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ending june 30th this is the first time
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it's fallen over the last month i want
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to bring in carol founder and ceo
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patrick carroll and patrick it's great
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to have you here uh this kind of goes to
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the argument you've already made you've
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been on the show before that it's it's
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all about the sun belt right now that's
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where the opportunity is and that's
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where people should be looking yeah i
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mean uh you know i've been acquiring
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properties in the sun belt states uh
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since 2004. since 2011 we've acquired
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we've done over 20 billion in
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transactions so
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you know i'd like to consider myself an
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expert in the space
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and what we saw early on was basically
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this is a lower cost you know business
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friendly higher lifestyle type of living
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you know
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so first we saw companies starting to
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move dallas texas austin texas tampa
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florida
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south florida with the jobs obviously
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the people come and then following kovid
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everybody moved out of the big cities
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everybody wanted space
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everybody wanted you know better weather
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and and so it's it's really brought a
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lot of awareness but now what's
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happening with mortgage rates because
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more i mean we're talking a 500
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difference on a mortgage so somebody
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that moved to florida and bought or
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bought in texas are now they're saying
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their mortgages jump and jump and their
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wages may not be jumping and that's
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that's a problem it's also pushing out
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new home buyers who are getting kicked
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out of the market now yeah we're going
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to see a slow down i think is my point
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here i think so too and i think people
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will be renting longer um i think rental
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housing is a viable option
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permanently
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it allows flexibility and it allows
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people um to adjust and and be in these
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areas but not be locked in by buying
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yeah um so yeah it's been a positive for
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our business the rent story is changing
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let's talk about that because your
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company has been raising rents but you
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were just telling me before we came on
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the air by about 30 percent get ready
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for the hate mail um what are you seeing
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in terms of renter retention sentiment
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in the market because it's not just in
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the sun belt like you're talking about
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the where you're raising rents 30
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percent it's also happening in northeast
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cities as well like here yeah it's a
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supply and demand thing um you know
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obviously people are not thrilled to see
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rent increases you know i think one of
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the important things to point out is our
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costs are going up so as our costs go up
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our you know our cost of interest our
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cost of renovations uh are cost of our
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employees
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you know we need to push those increases
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along through rent increases um now how
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long is that sustainable i'm not quite
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sure but uh it's it's been something
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where we've been able to retain our
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occupancies all-time high um so we
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haven't seen any slowdown in that yet
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are you seeing anybody that's out there
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like homeowners not necessarily in your
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company but a regular homeowner that's
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renting out their home because they see
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a business opportunity right now because
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people that can't buy are realizing
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they're going to have to rent absolutely
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i mean you know that's actually how i
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started in the business in o4 was buying
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single-family homes and renting them out
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and it's funny i'm getting ready to
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launch another part of my business which
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is single family for rent so it's almost
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come full circle but yeah i think
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between airbnb and and you know just
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buying homes to rent them out it's a
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great way for people to get into the
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real estate business that's interesting
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well that's how you did it you're right
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let's talk about labor supply costs as
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far as new construction home builders
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are trying to catch up we know that they
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are they
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they would love to build more homes
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because we still have low inventory
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across the country but those inflation
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costs obviously are a factor what are
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you seeing out there
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you know the supply chain has kept
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construction down and costs going up of
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you know make construction a little bit
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less viable so
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we are seeing a supply demand imbalance
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there's not as much affordable housing
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for people that want to move these areas
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so
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you know home builders can't keep up and
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they can't make the numbers work um and
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now they have a lack of buyers because
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of mortgage rates so
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again this has all kind of been perfect
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storm for the multi-family business you
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know that we've been in since 2011.
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before i gotta ask you because i get
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this ass i get asked this all the time
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uh where do you think mortgage rates are
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going to be at by the end of the year
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because every forecast in january has
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been completely wrong okay well i'll put
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out a wrong one too uh they're going to
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be higher i think they're going to be
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higher i think the fed's going to get a
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little too aggressive on rates okay uh
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and then have to pull back so
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by the end of the year though i think
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they'll be higher
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okay let's could we go with like a six
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and a half yeah yeah i'll go with uh six
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and a half on the 38th you'll throw it
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at six and a half percent of the third a
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year well that's that's better than what
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other people have been saying to seven
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and eight percent my parents i remember
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paid fourteen percent back in the early
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eighties so yeah we don't want to get
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there
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hopefully not yeah it'd be good for
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rental
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but yeah which is your business patrick
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it's great to have you on set in the
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studio thank you it's great to be on set
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yeah thanks for coming in sir
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