Dustin Owen on housing affordability: ‘I don’t think it’s going to be solved over the next four years’

In a recent episode of “The Loan Officer Podcast,” co-hosts Dustin Owen and John Coleman explore upcoming trends and shifts in the mortgage and housing markets following the 2024 election. Their conversation dives into new trade policies, tariffs, constructions costs, labor and more.

These questions and responses have been edited for length and clarity. To kick off the conversation, Owen and Coleman dive into interest rate predictions following the 2024 presidential election.

Owen: Let’s talk interest rates. When I was out in Denver before the election, the Mortgage Bankers Association (MBA) were predicting interest rates between 5.7% to 5.9% in 2025. Currently, they’re easily one whole percentage point or 100 basis points higher than that.

For interest rates to come down, we still need three things to happen. We still need unemployment to get worse, inflation to continue to come down, and we need a weakening economy, right? Well, with the new president and administration coming in, there are more economists stating that the policies would actually increase inflation. With the tariffs, inflation and interest rates could go up. So, we’ll need to monitor that. I’m reading articles that predict an 8% mortgage rate.

Coleman: I hear you often say we need a weakening of the job market. Does an entire sector of the job market need to go away overnight?

Owen: I think the job market is softer than “the man” wants us to know. I know some very competent professionals right now that can’t find the type of work they’re accustomed to. We’re about three years into a recessionary, contracting environment. Somebody ain’t telling the truth. When you ask about the labor market, only time will tell.

Coleman: Have you heard from loan officers? Are homebuyers bringing up the political landscape when they’re looking for homes?

Owen: It was like a faucet was turned on all of a sudden once the election was behind us. Regardless of who the winner was, people were like, “I can breathe now. I’m ready to buy a house.” Were these people Trump supporters? No, they just weren’t going to do anything. Now, people are calling, writing contracts and making offers.

Next, Owen and Coleman discuss home affordability and construction cost concerns.

Owen: If lumber is going to be 30% higher because of tariffs, then the cost to build just went up. And if labor is going to be scarce and more expensive, then the cost to build also goes up. So, if we have an affordability issue in our country, I don’t think it’s going to be solved over the next four years.

To end the conversation, Owen offers an outlook for the mortgage and housing markets in 2025 if Donald Trump implements certain policies — including those tied to immigration. 

Owen: I don’t see this being great for the overall economy. Now, I can see this being great for big business. And I can tell you first hand where regulation was put in place for the right reasons to protect people. But it also made everything more expensive. And those expenses get passed on to who? The consumer takes a hit.