12/01/2024 - Direction of Interest Rates and Preparing for the Market Opportunity Ahead

Dan Habib, filling in for his father Barry, who is battling cancer, delivered an insightful presentation that began with an emotional video message for Barry. He reviewed Barry’s accurate past predictions on core inflation, Fed actions, and mortgage rates, then analyzed current market trends, including inflation, Federal Reserve policies, housing dynamics, and crypto’s influence on real estate. Dan forecasted mortgage rates dropping to 5.875% in 2024 and a 4.1% nationwide home appreciation, emphasizing housing undersupply and how crypto wealth among younger investors could boost demand. He also examined demographic trends, birth rates, and their ties to housing and mortgage rates.

Introduction and Update on Barry Habib

• Dan Habib presented in place of his father, Barry, who is undergoing CAR T-cell treatment for cancer.
• The audience recorded an encouraging video message for Barry.

Review of Previous Year’s Predictions

• Dan highlighted Barry’s accurate forecasts from December 2023, including:
  • Core inflation dropping to 2.6%.
  • The Fed’s balance sheet reduction and rate cuts.
  • Home price appreciation of 4.25%.

Federal Reserve Policy Analysis

• Dan explained the relationship between the Fed funds rate, 10-year Treasury, and mortgage rates.
• He discussed how Fed rate cuts indirectly influence long-term mortgage rates.

Housing Market Analysis and Predictions

• Dan predicted:
  • 4.1% nationwide home appreciation in 2025.
  • 30-35% appreciation over the next five years.
• He emphasized demographic trends supporting sustained housing demand.

Cryptocurrency’s Impact on Real Estate

• Dan discussed the creation of $1.9 trillion in cryptocurrency wealth in 2024.
• He noted that crypto investors are twice as likely to spend their gains compared to other asset classes, which could positively influence real estate