YouSaid · the spoken record

Jim Egan

lines on the record: 32
first: 2025-06-16
most recent: 2025-06-16
sittings or episodes: 1
sources: podcast

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“Home builder confidence has been coming down this year. And when I look at all of the housing statistics that we forecast, what has been weakest in 2025 is single unit housing starts. Over the first four months of the year, we're down 7% versus where we were in the first four months of 2024. And we think that we are significantly underbuilt. So if we're going down and we're undersupplied, we do think that that from a home price perspective provides a little bit of support.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't want to ascribe this to home builder commentary, but what I do want to say when we look at the new supply of homes, single unit housing starts, building volumes. Look, we work closely with our economists, as I've been talking about, and our policy team, tariffs, right? Effective tariff rate now elevated versus where it's been historically, even if it isn't as high as we might have feared earlier in April. The primary way that's going to flow through the housing market is, in our view, homebuilding. The cost of goods to build homes going higher. Immigration policies. When we look at different sectors of the economy, the sector with the largest percentage of foreign-born workers, construction. So the cost and availability of labor also going to be contained.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I don't want to attribute what I'm about to say specifically to homeowner commentary, but we do have to look through all of this when we think about our pillars of the housing market, the supply aspect of that, which is both existing listings, which we've talked a lot about, but the new”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“And we get asked the question well, how do we fix the underbuilt aspect of this, or how do we fix the aggregate undersupplied aspect of this? And we do come back to this, right? To the point I made earlier, more than one out of every three homes in this country is owned by somebody over 65. From 1980 through 2012, that was 25%. It was effectively flat. It's increased pretty significantly. It's very regionally concentrated where those homes are owned. And eventually we do think that that's the supply that starts to help fix this, but it's an eventually thing, not nearly in our two to five year forecast horizon.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“So, it is something we're still incorporating when we think about housing not over the next two to five years, but this is really a longer term. Like this is a 10 year plus aspect to this. But we very much subscribe to the narrative that we are underbuilt and under supplied from U.S. housing holistically.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, the households that were homeowners before the pandemic hit in March of 2020 or made what was probably a pretty scary decision to buy in 2020 or 2021. Those are the households that on the perspectives that we're talking about to the points that you're making were really big winners here.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and it's that piece of it, the wealth effect in particular, is something that our economists have been talking about a lot to talk through just how confident the consumer has been in spending over the past quarters, over the past couple years. And so when they think about the consumer's ability to keep spending going forward, whether it's smaller purchases or larger home purchases, durable goods, they are looking more at the financial aspect piece of this. When we look at the growth in wealth in this cycle, it's been more on the financial asset side than it's been on the real estate side of things, which as the housing strategist with home prices at record highs took me a couple seconds looking at those numbers to see that that's what that is kind of what's going on underneath. And so when they think about the borrower's ability or the borrower's willingness, and by borrower, I should say consumers' willingness to keep making those expenditures, they are looking at equities. They're looking at financial assets and they're looking at the volatility there, but they do think we need a pretty healthy correction for it to really impact that in a material.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't think it's out of the realm of possibilities for this imbalance of supply and demand to take us through zero percent. I think that what we're talking about from how healthy mortgage credit is, the locked-in home buyer doesn't need to sell at lower prices. I don't see a true home price correction. That's not in our base case. That's not in our bear case. But we do have a bear case of negative 3% home prices by the end of this year. Base cases plus two. It's decelerating from here. It's slowing growth, but it's still positive on the national level. I think there is a realistic bear case where we go below 0%.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Could we talk about inventory increasing? Demand has not increased alongside inventory. Affordability is still very, very challenged. And, I mean, we mentioned 1.9% decrease year to date from an existing home sales perspective as supply increases and demand stays flat, sometimes it's just as simple as looking at the supply and demand piece. We've started to see home price appreciation decelerate 4.1 to 3.4% just over the past two months 25%, a quarter of the largest 100 MSAs in the country are already seeing home price declines.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's difficult for us to foresee a place where mortgage foreclosures pick up too significantly in the forecast horizon.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Because of our experience 17 years ago now, mortgage servicers have a much more varied toolkit at their disposal to prevent, we'll call them foreclosure mitigation options, modifications and the like.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Adjustable rate mortgages and not just adjustable rates. Short reset arms with teaser rates, option arm mortgages that could negatively amortize, so the balance of your mortgage could get bigger over the first couple years of that product. Those were payments that as we hit kind of an economic hiccup, unemployment rate picks up, money becomes a little bit more tight, and then your mortgage payment ratchets higher. That makes it even more difficult for you to make that monthly payment. We don't have that this time. Not only that, the home ownership rate back then was over 69%. Today, I believe it's 65.1 as we walk in here. Four percentage points.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So I think there are a few things going on. Another piece to the different levels of leverage today versus back then was the fact of the types of leverage we were giving borrowers. According to data from, I believe it's the FHFA, 92.5% of mortgage balances in the country right now are fixed rate. Most of those are 30 or fixed rate. Back 2005, 2006.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“We've talked demographics in the past And one of the underlying trends in the housing market has been the fact that we're now at a place where over one out of every three homes, over 33% of the housing market is owned by people over the age of 65. And when you look at where, yes, there's Florida and there's Arizona and there's South Carolina. But when you look at where they're more concentrated as a percentage of the housing stock in particular, it's in the northeast. It's in New York. It's in New England. We've rerun this analysis post the pandemic, their tendency to age in place has continued to get more and more prevalent. So I think you combine some of these trends and This is what you're left with”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“So, from the data that we've looked at, his comment around the migratory patterns, they didn't start in COVID when people moved to the southeast. They were happening before that. That makes sense to me. I don't have the specific numbers to completely agree with that as a research analyst on air. But what I can say as well, which could be contributing to that.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's where you're seeing softer year over year home price growth or in some instances where you are actually seeing prices come down on a year over year basis. The other side of that coin is the northeast. It's New York. It's New England. It's the northern Midwest. Those are places where inventories are still falling. Inventories are far shy of where they were in the fourth quarter of 2019. And to put all of these percentages into context nationally, inventories are down, I believe it's 28% from the fourth quarter of 2019. So to talk about places where inventories are actually up relative to 4Q 2019, that is an outlier relative to national numbers.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, so we've been trying to figure out what are the most, because we talk about home prices nationally. The housing market is so hyper local that those national numbers are helpful, but they don't describe the dynamics that are going on at the ground level at any individual place in the country, right? And so when we look at the growth in inventory, looking at it year over year, looking at it since the fourth quarter of 2019, before the pandemic started, you're seeing the sharpest increases in the south, right? Like you've seen it in Florida. You've seen it in Texas. A couple states that show up a little bit more on the year over year numbers or Colorado, North Carolina. When we look at the implications from home price perspective, what we've seen to be more, at least statistically significant for now are places where either those inventory levels are higher, highest compared to the fourth quarter of 2019, which you have New Orleans, 11 of the top 14 MSAs from that perspective are in Florida or Texas.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and these people have been, lock in effect has had people stuck in their homes in a lot of instances for probably longer than they wanted to be. Browing families. Both in terms of number of children as well as larger children, like just growing needs for more space, if those, for lack of a better word, if those dreams have been delayed, like maybe the realization that rates might not come down all that much, maybe it's time to do that. And home prices are up 50% since March of 2020, like over the past five years, you have a 50% growth in home prices. It's insane. Perhaps those homeowners with that equity might be just a little marginally more willing to listen.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“The question as to who is selling, I'd argue probably one of the more important questions in the housing market right now. So, it's a question we're trying to answer, but it's one that's a little bit more difficult to answer. We can identify at this point where the inventory is picking up more, right? You look in states like Florida has some of the steepest increases. Texas has had some pretty steep increases. And we get a lot of questions, for instance, in Florida, cost of insurance increasing. Are the ancillary costs of homeownership? Is that forcing inventory? We don't know if that's the case. empirically prove that right now, but I think you combine that with. 2021 was a long time ago”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“It's the highest percentage change when I look at year-over-year growth, what we just saw with the most recent data that came in, it's now the biggest it's been on a year-over-year basis since the GFC. It's also the second largest it's been in the history of the data, which goes back to the early 1980s.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“But I can't sit here like I have been able to in the past and say we're at historically low inventories, right? We are starting to see to the point that you're making, we are starting to see for sale inventory volumes move higher year over year, inventory volumes are up almost 18 consecutive months now, almost a year and a half. They're up almost 20% from those lows. And while that's still below where we were in the fourth quarter of 2019, below where we were when rates picked up massively in inventories kind of retrenched, that's still a pretty healthy increase. We're starting to see a little bit more supply come on the market here despite the fact that the lock-in effect remains 250.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if I were to take a 10,000 foot view and answer your question, the lock in effect is clearly still playing a role, right? If we look at overall inventory levels as a share of the outstanding housing market, the chart still looks like there's a typo given how low inventories are.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and so we think that the Joint Center for Housing Studies at Harvard, right? They have some great statistics on affordability and they will qualify 30% of your income as the threshold for are you cost burdened on shelter. So 24 to 26%, we're not saying that those homeowners are cost burdened, but they're spending two to three times more of their monthly paycheck on that mortgage than somebody who was fortunate enough to buy prior to 2021, which you think has to be crowding out something and maybe that's it hasn't been spending. That's clearly been the case from the data that we talked about earlier, but maybe it's these marginal payments on other debt surface products.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“If you bought a home prior to 2021, let's say you bought in 2016, median priced home, 20% down, prevailing mortgage rates at the time, that was a 30-year fixed rate mortgage. Most homeowners who bought at that time refinanced at record lows in 2020, 2021. And if we just assume that their incomes have been growing along the levels that median household incomes have been growing for the past nine to ten years, their monthly payment is a share of their income is 8 to 9 percent today. Anybody who bought before 2021, that median household, we think that payment is probably below 12%. If you bought the past three years as rates moved materially higher, your monthly payment as a percentage of your income, median household, probably 24 to 26%.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Those tend to be borrowers who in this post GFC past 15 years lending standards have been tighter, more likely to be renters. We're not capturing rent. I see. And so their payments are getting tougher. But then to your point, now over the past 12 to 18 months, now prime delinquencies are moving higher. These are households that are much more likely to be homeowners. And what we think we're seeing there is exactly the dynamic you're talking about.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Their effective rates at 4% are dragging down that payment. Only 60% of homeowners even have a mortgage. So 40% own their home free and clear of any debt. They're not contributing to the numerator. And the 35% of households that are renters rents don't count as debt service in these equations. They're contributing to the denominator in terms of the income piece of this calculation, but they're not adding to the service piece or the debt service piece. And so that's all helping to drag this down and potentially missing a few pockets of specific borrowers that are under a lot more pressure than those aggregate numbers would suggest.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Most of those borrowers were able to take out that mortgage at historically low rates in 2020, 2021, the effective rate on the outstanding right now, 4%. Prevailing mortgage rates, 6.8% as we're in this studio today. So when you think about two-thirds of the country are homeowners”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Might not be a function of aggregate credit worthiness. And that's when it comes into looking at these statistics that we need to use to think about just kind of broadly how the economy, how the consumer is going to move forward. But I mentioned debt service ratios, right? When we think about what's brought debt service ratios down to kind of some of the lowest levels we've seen in decades, the mortgage market plays a big role. The largest piece of debt on any household balance sheet that owns a home is almost certainly going to be that mortgage. The lock-in effect that we've heard in the housing market, that's a function of the fact that a majority, an overwhelming majority of mortgage debt in this country, 30 or fixed rate mortgages.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“So, delinquency, as we're talking about it here, is somebody who is 30 days past due on their loan. So we'll either talk about it in terms of 30 days or sometimes 60 plus days, but you've missed at least one or two payments on a debt instrument, whether that's an auto loan. We'll look at it for mortgages, credit cards, and so on and so forth.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think what we're seeing, and this is something as part of my role at Morgan Stanley, I work on the teams that look at auto credit within asset-backed securities, credit cards, all of those other consumer products. And one of the... Call Apparent contradictions that we were seeing was the macro consumer data that we were just discussing incredibly healthy. Consumer keeps spending. And then we're seeing delinquencies climb. Delinquencies climbing, with the unemployment rate as low as it was, that was something that we had been asked to explain a fair amount of times. We're trying to find better data to explain. And so the impetus behind that report was to kind of say, From a pockets perspective, we are seeing a little bit of those delinquencies climb.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Think another piece to that when we think about just the consumer balance sheet, one of the statistics that gets quoted all the time is the just debt service ratios, a debt service to income, it's above where it was in 2021, but it's still at some of the lowest levels we've seen in the past couple decades that capital Consumer, the holistic balance sheet of the consumer, that still looks healthy. We don't think that the consumer holistically is overlevered. Might be some pockets of pressure, but we don't think they're in aggregate overlap.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I think there are a number of different things driving the underlying strength in the consumer. We do a lot of work across our debt analysts in Morgan Salon research with our economists to kind of try to tie these positive macro numbers to some of the things we're seeing on a more micro level. And look, the unemployment rate, we're at 4.2%, very low unemployment rate. It's been low for a few years now. And on top of that, you've had an incredible amount of wealth growth. There's been volatility in markets recently, but whether it's home prices at record highs and the record amount of equity that homeowners and 65% of Americans are homeowners, the equity that they have in their home, or the wealth they've been able to gain from appreciating financial assets, that's contributed to consumers' ability to spend.”
2025-06-16 · Odd Lots · Jim Egan on the Mortgage Gap That's Dividing America · IDENTIFIED FROM THE TRANSCRIPT · source