<h2>Weekly Blog #10</h2>
&#8220;There is no such thing as a free house.” Milton Friedman paraphrase 
“There’s no such thing as a free house; someone always pays the mortgage.” Milton Friedman’s warning may pre-date our current housing debates, but the lesson is timeless. Lately the rallying cry has been, “eliminate greedy developers and let government build the homes.” This sounds noble: remove the profit layer, erect neat, low-cost units, and hand the keys to families in need. Strip away the profit and you strip away the problem … right?
Follow the invoices instead of the slogans and the picture changes fast. Government-sponsored “affordable” projects always cost more and deliver less than their profit-seeking counterparts. We are not talking about granite countertops or rooftop pools; we are talking about bureaucracy, red tape, and the slow bleed of incentives. Los Angeles offers the poster child: an audit of Proposition HHH supportive-housing developments logged construction budgets around <a href="https://controller.lacity.gov/audits/high-cost-of-homeless-housing-hhh">$600,000</a> per apartment—more than a market-rate condo down the street. Statewide numbers are even starker. California now sports half-a-dozen “affordable” complexes topping <a href="https://www.latimes.com/homeless-housing/story/2022-06-20/california-affordable-housing-cost-1-million-apartment">$1 million per unit</a>—a price tag that would buy a hillside view in Malibu.
These aren’t statistical outliers; they are what happens when a project carries not just lumber and labor but political mandates, trade-union requirements, environmental reviews, public-art quotas, and years of carrying costs while permits creep through city hall.
Yes, the tenant pays below-market rent, but that’s only because the real bill is handed to the taxpayers. Direct subsidies flow in via federal low-income housing tax credits, state bonds, and local sales-tax levies. Cities layer on soft loans and “forgivable” grants that never appear on the builder’s profit-and-loss statement but do appear on yours every April 15. Land set aside for public housing usually comes off the property-tax roll, shifting the burden onto remaining taxpayers. Factor everything in and the public frequently shoulders $300,000 to $500,000 of hidden cost per door—well above what a private developer needs to break even on a comparable unit.
Why the price gap? Start with incentives. Private builders live in mortal fear of cost overruns; every dollar spent is a dollar off the bottom line, whereas agencies operate on “use-it-or-lose-it” budget—if a change order fattens the bill, it becomes justification for a larger appropriation. Add <a href="https://www.dol.gov/agencies/whd/government-contracts/construction">Davis-Bacon</a> prevailing-wage rules and local project-labor agreements, and labor costs jump 20–30% before the first shovel hits dirt. Add “layer-cake” financing—often six or more funding sources, each with its own paperwork and compliance clock—and legal fees snowball while the interest meters ticks. Political add-ons round out the package: public-art installations, ground-floor community centers, on-site social-service offices. Worthy ideas, none of them free.
Even if Uncle Sam never built another unit, he still dictates the price of every home through regulation. According to the National Association of Home Builders, impact and utility fees now average nearly $100,000 per new single-family home. Regulation—zoning limits, design mandates, energy codes—now accounts for roughly a quarter of the final price of a house and about a third of a multifamily project. In New England, the typical permit-to-completion timeline currently exceeds a year, and every month of delay adds interest, insurance, and risk that must be recouped in the sale price. Economists Edward Glaeser and Joseph Gyourko call the resulting gap between market value and physical cost the “zoning tax”; in supply-constrained metros it can swell to fifty, one-hundred, even three-hundred percent of replacement cost.
Strip away those frictional expenses and “affordable” stops being a subsidy program and starts being a market outcome. Examples already exist. Modular construction can slash labor hours and weather delays, but only if local codes welcome innovation instead of treating it like a science experiment. Three-D-printed concrete shells can frame a house in a day, yet languish under nineteenth-century building regulations. Land-light zoning—think backyard ADUs, duplex conversions, or micro-lots—allow small builders to turn a postage-stamp parcel into two starter homes instead of one McMansion. Every breakthrough mentioned above was hatched by entrepreneurs chasing a return on capital, not City Hall bureaucrats.
So, what should policymakers do? Here are five reforms that would cost taxpayers nothing:
<ol>
<li>Permit-speed guarantees—decisions in 90 days or less, or the application auto-approves.</li>
<li>By-right zoning—especially near transit corridors where demand already exists.</li>
<li>Impact fee waivers—for entry-level units under 1,200 sq ft or below HUD affordability limits.</li>
<li>Competitive bidding—ditch blanket union mandates on publicly funded jobs.</li>
<li>Sunset clauses—require every housing regulation to justify itself every five years or expire.</li>
</ol>
None of these eliminate profit. They just let capital flow to the places it&#8217;s most needed.
Calling profit greed makes for good political grandstanding, but it’s naïve if not stupid. Profit is a compass needle; it attracts resources to places of scarcity. Clamp a magnet of regulation around that compass and you do not eliminate greed—you eliminate direction. Capital wanders off to self-storage REITs, data centers, or even crypto-mines—anywhere with fewer zoning meetings and faster, higher return on investment.
Economic freedom creates abundance from scarcity because builders are rewarded for solving problems. Take away the payday, and you take away the people who know how to pour concrete on time and under budget.
Public housing advocates are right about the symptom—high rents and low vacancy—but wrong about the cure. Banning profit doesn’t lower housing costs; it just hides them, bloats them, and sticks someone else with the bill. The fastest path to affordability isn’t to social-engineer supply. It’s to unleash it.
Cut the red tape. Unlock the zoning map. Let builders chase margins. Prices won’t fall because the government declared them affordable. They’ll fall because the market finally made them plentiful.
Mark Lazar, MBA 
CERTIFIED FINANCIAL PLANNER™
&nbsp;

The Affordable Housing Myth

<h2>Weekly Blog #9</h2>
&#8220;There is nothing either good or bad, but thinking makes it so.&#8221; William Shakespeare 
Let’s start with a question: What does your credit score really say about you? If you’re like most people, you might assume that it measures financial responsibility, discipline, or even moral worth. After all, banks, insurance companies, landlords, and sometimes even employers use it to size you up. But here’s the uncomfortable truth: your <a href="https://www.wasatchfinance.com/glossary">FICO</a> score is less a reflection of who you are, and more a snapshot of how well you play Fair Isaac’s game.
The Fair Isaac Corporation—now commonly known as FICO—launched the first general-purpose credit scoring system in 1958. The idea was simple: assign a numerical value to a borrower’s likelihood of repaying a debt. And it worked. Lenders needed a standardized, non-emotional method to evaluate applicants, and Fair Isaac delivered.
Today, the FICO score remains the gold standard in credit risk assessment. It ranges from 300 to 850, although hitting the upper end is about as common as a unicorn riding a Harley. While there are other scoring models, most lenders (especially mortgage underwriters) still rely on FICO.
The irony? FICO doesn’t measure wealth, income, or even savings. You could have $10 million in the bank and still end up with a lower score than a college sophomore with a $500 secured card and good habits. Why? Because the algorithm rewards behavior, rather than balance sheets or six-digit incomes.
Anatomy of a Credit Score. Your FICO score is a composite of five weighted components:
<ul>
<li>35% Payment History: Have you paid your bills on time? Nothing drags your score down faster than a missed or late payment.</li>
<li>30% Amounts Owed: This includes not just how much debt you have, but how much of your available credit you’re using (aka “credit utilization”).</li>
<li>15% Length of Credit History: Longer is better. Creditors like to see long-term relationships.</li>
<li>10% Credit Mix: A variety of credit types (mortgage, auto loan, credit cards, etc.) reflects well on you.</li>
<li>10% New Credit: Opening too many accounts in a short period can make you look desperate—or reckless.</li>
</ul>
What doesn’t Fair Isaac consider? Your income, your assets, your net worth, and your investment portfolio. In Isaac’s eyes, a debt-free, cash-paying minimalist might be invisible—or worse, unworthy of credit.
Which brings us to the central question: Is Isaac fair? Well, it depends on what you expect from the system. If you believe a credit score should assess a person’s holistic financial health, then no—it’s wildly incomplete. But if your goal is to predict whether someone will make their payments on time, it’s a pretty reliable tool.
Still, there are some clear shortcomings:
<ul>
<li>Debt Avoiders Get Penalized: If you’ve always paid cash, have no loans, and never needed credit? Congratulations—you’re financially prudent and systemically punished.</li>
<li>Mistakes Linger: A single missed payment can haunt you for seven years. Context doesn’t matter.</li>
<li>Gamification Is Real: People make financial decisions to game their score rather than build long-term wealth. That’s like skipping lunch to weigh less at your doctor’s appointment.</li>
</ul>
Perhaps the most glaring flaw is this: FICO doesn&#8217;t reward financial success; it rewards predictable debt behavior. There&#8217;s no bonus for owning your home free and clear, amassing a seven-digit 401K account, or avoiding consumer debt entirely. The system wants you to borrow—just not too much—and to pay faithfully—just not too early.
If you want to play the game effectively, here are a few rules to follow:
<ol>
<li>Always Pay on Time: Set reminders, automate payments. Just don’t miss it.</li>
<li>Monitor Your Utilization: Try to keep balances below 30% of your total available credit, even if you pay in full each month.</li>
<li>Keep Your Oldest Accounts Open: Credit age matters. Closing your first credit card can lower your average account age.</li>
<li>Open New Credit Sparingly: Every new inquiry dings your score, and opening a dozen retail cards at holiday time isn’t helping.</li>
<li>Check Your Report Annually: Use <a href="https://www.annualcreditreport.com">annualcreditreport.com</a>. It’s the only federally authorized site. Review all three bureaus (Equifax, Experian, TransUnion).</li>
<li>Dispute Errors Promptly: Mistakes are more common than you’d think. Correct them before they cost you.</li>
<li>Don’t Chase Points for Points’ Sake: Credit card rewards are great, but applying for cards just to get the signup bonus is a short-term play.</li>
</ol>
And here’s a subtle strategy most people miss: if you’re planning a major loan—say, buying a house—don’t touch anything for at least 90-days beforehand. No new accounts, no major purchases, no surprises. Think of it as a financial quarantine before your big exam.
As of today, the median FICO score in the U.S. is around 715. A score above 740 gets you most of the best rates and terms. Anything above that is just bragging rights. Lenders don’t offer bonus rates for an 830 versus a 780. There’s no black card reserved for the perfectly scored.
That’s why the real goal isn’t the highest score—it’s wealth creation. Credit, if used wisely, is your best friend. Your credit score should serve to increase your wealth, not the other way around. Sometimes, building wealth means using credit strategically: refinancing, investing, or consolidating at lower rates. Other times, it means ignoring the score entirely in favor of building assets and reducing liabilities.
Your credit score matters. It can impact your mortgage rate, your insurance premium, even your job prospects. But it’s not a character test. It’s not a substitute for sound financial planning. And it certainly isn’t worth obsessing over.
So… is Isaac fair? He’s efficient. He’s influential. But fair? Only if you know the rules—and play by them.
At Wasatch Finance, we believe credit is a tool—not a trophy. Used wisely, it can help build lasting wealth. Used carelessly, it can create lasting regret. Either way, the score is just a number—what matters is how you leverage it.
Mark Lazar, MBA 
CERTIFIED FINANCIAL PLANNER™

Is Isaac Fair?

<h2>Weekly Blog #8</h2>
“Price is what you pay. Value is what you get.” Warren Buffett 
Adam Smith’s invisible hand tells us that in a free market, prices are set by what a buyer is willing to pay and a seller is willing to accept. And for many goods and services, that’s true enough. But real estate is different. A buyer may be willing to pay $500,000 for a home, but if the bank won’t finance 80% of that amount, the deal’s dead in the water. Unlike a pair of shoes or a share of stock, the value of a property often depends on more than just market sentiment—it depends on lending standards, appraisals, income potential, and cold, hard math.
So, what’s a house really worth? It depends on who’s asking—and why. From comps to replacement cost, from cap rates to <a href="https://www.wasatchfinance.com/glossary">discounted cash flow</a>, there’s more than one way to size up a property’s value. Let’s break it down.In residential real estate, the most common method of valuation is a comparative market analysis (CMA), or “comps.” This approach compares recent sales of similar homes in the same area—adjusting for variables like size, condition, lot, location, and upgrades. It’s the real estate equivalent of pricing a used car on Kelley Blue Book.
But comps are only as good as the market they&#8217;re based on. In a hot market, buyers may overpay because they&#8217;re emotionally driven or fearful of being priced out. In a cold market (think 2009–2011), even desirable homes may sit unsold. In other words, comps reflect what someone was willing to pay—not necessarily what something is intrinsically worth.
If you’ve ever heard someone say “a house is worth what someone’s willing to pay for it,” they’re quoting the comps model. But that’s a bit like saying a donut is worth $20 because someone on a hunger strike finally cracked. Not exactly an objective measure.
Another method is replacement cost—how much it would cost to rebuild the property from scratch, using current labor and material prices. This is the method used by insurance companies when underwriting homeowners’ policies. It’s especially useful in post-disaster situations where the land value is unchanged but the structure must be replaced.
Here’s the catch: replacement cost ignores land value and market demand. A custom-built log cabin on the edge of nowhere might cost $500K to recreate, but if nobody wants to live there, good luck selling it for anything close.
For investment properties, valuation is typically driven by the income approach. This method assesses what a property is worth based on the income it generates. The most common metric used to analyze investment properties is the <a href="https://www.wasatchfinance.com/glossary">Capitalization Rate</a> (Cap Rate). The formula is simply; Cap Rate = Net Operating Income (NOI) ÷ Market Price
A rental property producing $70,000 in net annual income and priced at $1 million has a 7% cap rate. Higher cap rates mean higher yield—but often higher risk. Lower cap rates usually reflect stronger locations or more desirable properties.
Cap rates are a function of interest rates, and historically run 250–350 basis points above the 10-year Treasury note yield. This 2.5–3.5% <a href="https://www.wasatchfinance.com/glossary">spread</a> reflects the required <a href="https://www.wasatchfinance.com/glossary">risk premium</a>. Real estate investors require in order to take the risk of investing. As of today, the 10-year yield is ~4.5%, which means a prudent investor should seek a cap rate north of 7%.
This model is especially relevant for investors focused on cash flow. If a property’s net income doesn’t justify the price tag—especially when compared to other investments with similar risk profiles—it’s overpriced.
The DCF method attempts to model the present value of future cash flows, discounting them at an appropriate risk-adjusted rate. Think of it as the cap rate model on steroids. It&#8217;s ideal in theory—and often a mess in practice—because it&#8217;s highly sensitive to assumptions about rent growth, vacancy rates, exit cap rates, and discount rates.While models and math provide the scaffolding of valuation, real estate—especially residential real estate—is emotional. A young couple might stretch their budget for the perfect backyard. A retiree might pay a premium to be near grandkids. A tech exec might drop $5 million on a teardown in Palo Alto just because it’s Tuesday.
Scarcity also plays a role. In markets like Boise, Austin, or Salt Lake City—where housing supply lags population growth—prices are driven higher not because homes are worth more, but because there simply aren’t enough of them.
And let’s not forget the biggest wildcard of all: interest rates. A home priced at $500,000 with a 3% mortgage feels very different than the same home with a 7% mortgage. Housing affordability isn&#8217;t just about price—it’s about monthly payment.
So… What’s it worth? It depends who’s asking.
<ul>
<li>To the buyer, it’s worth what they can afford—and justify.</li>
<li>To the appraiser, it’s worth what the comps suggest.</li>
<li>To the insurer, it’s worth the replacement cost.</li>
<li>To the investor, it’s worth the present value of future cash flows.</li>
<li>To the market, it’s worth whatever clears the transaction.</li>
</ul>
Real estate value isn’t fixed—it’s a moving target shaped by macroeconomics, local market trends, interest rates, and emotion. It’s part science, part art, and part psychology.
At Wasatch Finance, we believe valuation should be grounded in fundamentals, not hype or emotion. Whether you&#8217;re buying a primary residence, flipping a property, or analyzing a rental deal, our job is to help you ask the right questions—and run the right numbers. Because in real estate, as in life, knowing what something is really worth makes all the difference.
Mark Lazar, MBA 
CERTIFIED FINANCIAL PLANNER™

What’s it Worth?

<h2>Weekly Blog #7 </h2>
“I’d gladly pay you Tuesday for a hamburger today.” Wimpy
Washington bureaucrats would like the rest of us to believe that government accounting is somehow different—and more complicated—than personal or corporate accounting. They suggest that managing the federal coffers requires the knowledge and expertise of the managerial class. Nothing could be further from the truth.
While the federal government doesn’t publish a complete balance sheet, it does issue an annual <a href="https://www.fiscal.treasury.gov/reports-statements/financial-report/government-financial-position-and-condition.html">Statement of Financial Position</a>, which provides explicit values for federal assets such as student and other government loans, tax and trade receivables, deposits and currency, and official reserve assets. The government also has non-financial assets, such as real estate (buildings and land), mineral and energy resources, military equipment, infrastructure, and intangible assets. However, it doesn’t assign a market value to these assets. As a result, there is no “Net Position” or clear picture of Uncle Sam’s net worth.
That said, the Congressional Budget Office does provide regular accounting of the government’s income statement. Below is an excerpt from the <a href="https://www.cbo.gov/system/files/2025-01/51118-2025-01-Budget-Projections.xlsx">CBO</a>’s projections issued this January:
<figure id="attachment_441" aria-describedby="caption-attachment-441" style="width: 844px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-441" src="https://backend.wasatchfinance.com/wp-content/uploads/2025/05/CBO-Projections-300x124.jpg" alt="" width="844" height="349" srcset="https://backend.wasatchfinance.com/wp-content/uploads/2025/05/CBO-Projections-300x124.jpg 300w, https://backend.wasatchfinance.com/wp-content/uploads/2025/05/CBO-Projections.jpg 591w" sizes="auto, (max-width: 844px) 100vw, 844px" /><figcaption id="caption-attachment-441" class="wp-caption-text"><a href="https://www.cbo.gov/system/files/2025-01/51118-2025-01-Budget-Projections.xlsx">Congressional Budget Office</a></figcaption></figure>
Virtually all reports and publications addressing fiscal policy tend to focus on several key metrics: the federal deficit, the national debt, and debt-to-<a href="https://www.wasatchfinance.com/glossary">GDP</a>. Policy wonks who follow discussions regarding the national budget debate may hear conflicting metrics at time. For example, debt-to-GDP (federal outstanding debt divided by gross domestic product) is often cited as 100%. Similarly, the federal deficit (federal tax revenues minus expenditures) is said to be approximately $1.9 trillion. Both of those numbers are wrong.
Remarkably, Washington’s bean counters quietly omit intragovernmental obligations—held by agencies such as the Social Security and Medicare Trust Funds. The rationale? Since the government doesn’t remit interest payments on these bonds, they claim it’s not technically “debt”—just an accounting obligation.
The total amount of intragovernmental debt is currently $7 trillion—no small sum. This explains the oft-told narrative that Social Security is insolvent because “the government is stealing from it,” which is patently false. However, what the federal government is doing is more akin to borrowing money from a family member—and then conveniently omitting that loan from his financial statements when applying for a mortgage. In this case, the lender would be future Treasury bond investors. That’s not creative accounting; it’s borderline fraud.
I uploaded the CBO’s data into <a href="https://chatgpt.com/">Chat GPT</a> and asked it a simple question: if the US government was applying for a mortgage, would you approve or decline the loan? Here’s the response:
Underwriter Decision: DECLINE. 
Reason: The borrower exhibits insufficient debt service coverage, negative free cash flow, and an unsustainable debt trajectory—this is a high-risk borrower already deep in debt, spending beyond their means, with no clear repayment plan. Even with appreciating “assets” (i.e., economic output), they’re structurally overleveraged.
From a private lender’s perspective, no prudent underwriter would approve a mortgage (or even a home equity line) for a borrower whose financials mirror the U.S. government’s adjusted balance sheet.
Proper underwriting focuses on the Four Cs of Credit: character, capacity, capital, and collateral. When we fail to adhere to traditional lending guidelines it always ends badly. Every credit bubble (and subsequent bust) starts with a departure from traditional underwriting guidelines. The 2007–2009 housing crisis wasn’t the fault of the Monopoly Man (AKA the Wall Street investment banker), but rather <a href="https://www.hud.gov/">HUD</a> and its reckless stated-income/<a href="https://www.wasatchfinance.com/glossary">subprime loan</a> program.
To be clear, credit, if used judiciously, is your friend. Borrowing for the purpose of making a prudent investment—one with a return that sufficiently exceeds the cost of credit—is a proper use of credit. However, borrowing for the sake of increasing consumption isn’t just folly—it’s dangerous.
As of today, the government’s cost of funds is roughly 4%. However, if the CBO’s forecasts are correct, in just ten years the total national debt will be nearly $60 trillion with annual net interest exceeding $2 trillion/year—roughly the size of Canada’s current annual GDP.
Absent a major fiscal epiphany and subsequent course correction, the trajectory of the US’s finances is unsustainable. Presently, the world is still purchasing Treasury bonds and the US dollar is still the primary reserve currency. However, if Washington bureaucrats don’t come to their senses soon, the global markets will eventually shun dollar-denominated assets.
To that point, the famous investor, Ray Dalio, recently opined that the US was just three years away from what he termed a <a href="https://www.businessinsider.com/ray-dalio-bridgewater-us-government-debt-deficit-treasury-markets-dollar-2025-2">debt heart attack</a>. If/when that day comes, US bonds will no longer be considered risk-free and Uncle Sam may find the only credit option open at that time would be a hard money lender.
Mark Lazar, MBA 
CERTIFIED FINANCIAL PLANNER™
&nbsp;

Creative Accounting

<h2>Weekly Blog #6 </h2>
“Markets can remain irrational longer than you can remain solvent.&#8221; John Maynard Keynes
If it seems like markets are backward, sideways, and upside down these days, you’re not imagining things.
We’ve officially reentered the realm of the <a href="https://www.wasatchfinance.com/glossary">Fed Put</a>—that bizarre world where bad news is interpreted as good news because it might coax the Federal Reserve into cutting rates. Markets aren’t reacting to fundamentals; they’re reacting to what they expect the Fed will do about the fundamentals. So, when inflation comes in soft or jobless claims tick up, the market doesn’t panic—it rallies. Not because the economy’s improving, but because investors believe the Fed will intervene. Powell sneezes and traders run for Kleenex.
Meanwhile, something strange is happening in the bond market. Since the beginning of April, the yield on the 10-year Treasury has surged by 40 basis points. That’s not a rounding error. That’s a full-on spike. Under normal conditions, a move like that would push mortgage rates significantly higher. But so far? Mortgage rates haven’t moved much at all. The opposite, in fact—they’ve been surprisingly stable.
Contrary to what CNBC would have you believe, mortgage rates don’t track the Fed’s short-term (<a href="https://www.wasatchfinance.com/glossary">fed funds</a>) policy rate. Instead, mortgage rates are priced off the 10-year Treasury note, or the long end of the yield curve, which makes sense since the average duration of a 30-year loan today is 8–9 years. So, when Treasuries sell off, and the yield rises, mortgage rates should follow. The fact that they haven’t—yet—is worth watching.
Adding to the weirdness is the behavior of the broader market. Usually, when uncertainty rises—whether from geopolitical risk, economic slowdowns, or erratic trade policy—investors go <a href="https://www.wasatchfinance.com/glossary">risk-off</a>. They sell stocks and move their money to safe-haven assets like Treasuries. That pushes Treasury prices up and yields down. But not this time. Right now, investors are selling both stocks and bonds. That means there’s no traditional flight to safety—just a broad, correlated sell-off of everything. Which explains why Treasury yields are higher despite elevated uncertainty. It’s not just bad news—it’s confusing news. And markets hate confusion.
The other puzzle is why mortgage rates haven’t followed Treasuries upward. Part of the answer lies in mortgage-backed securities (MBS). Unlike Treasuries, MBS <a href="https://www.wasatchfinance.com/glossary">spreads</a> haven’t widened much, which is keeping mortgage rates from rising in tandem with the 10-year. But that may not last. If MBS investors start demanding more compensation for volatility—or if broader market conditions deteriorate—those spreads could widen, and mortgage rates would be next in line for a bump.
On the inflation front, there’s a glimmer of optimism. Since the start of the year, inflation has been trending lower. The Fed’s preferred measure—the PCE, or Personal Consumption Expenditures index—is currently sitting at 2.2%. That’s just above the Fed’s stated 2% target. Not enough to pop champagne, but enough to potentially ease off the monetary brakes.
And the Fed may be getting ready to do just that. Futures markets are pricing in about an <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">80%</a> chance the Fed holds rates steady at the May meeting. But come June? There’s a decent probability of the first rate cut. Whether they follow through depends on how inflation data, job growth, and consumer spending shape up over the next few weeks. But the possibility is real—and so are the implications for long-term rates and mortgage pricing.
All of this puts mortgage professionals in a bit of a bind. Clients are reading headlines about inflation cooling and the Fed possibly cutting rates. But those headlines haven’t yet translated to cheaper mortgages. The 30-year fixed mortgage is still hovering near recent highs, and many borrowers are wondering when the break comes—or if it ever will.
What we’re seeing is a tug-of-war between competing narratives. On one hand, inflation is moderating, which supports lower rates. On the other hand, persistent economic uncertainty, sticky wage growth, and unpredictable trade policy are spooking both bond and equity markets. The result is a higher yield environment with surprisingly calm mortgage pricing—for now.
It’s also a reminder that rates don’t move in a straight line, and they don’t always behave rationally in the short term. Markets are driven by expectations—of <a href="https://www.wasatchfinance.com/glossary">monetary</a>/fiscal policy, trade policy growth, inflation, and global stability. When those expectations shift, pricing adjusts—sometimes violently. That’s what we’re seeing right now: the market trying to divine which narrative to believe.
For mortgage brokers and loan officers, this environment demands proactive, judicious communication. Clients need help separating noise from signal. Just because Treasury yields spike doesn’t mean mortgage rates will immediately follow. And just because the Fed is considering a rate cut doesn’t mean borrowers should wait around hoping for a unicorn deal. The bond market is volatile, the MBS market is twitchy, and lenders are adjusting pricing cautiously.
If the Fed does cut in June, and inflation continues to cool, there’s a reasonable chance that mortgage rates will trend lower in the second half of the year. But if uncertainty persists—or if the bond market starts pricing in long-term fiscal imbalances or geopolitical risk— rates could remain elevated longer than expected. Either way, mortgage professionals should buckle up—it’s going to be a ride.
Mark Lazar, MBA 
CERTIFIED FINANCIAL PLANNER™
&nbsp;

Return of the Fed Put?

Introduction: Private lending has emerged as a compelling alternative for real estate investors seeking flexible financing solutions beyond traditional avenues. In this blog post, we delve into the distinct benefits that private lending offers to investors navigating the dynamic landscape of real estate investment.
<ol>
<li>Greater Flexibility:
<ul>
<li>Unlike conventional lending institutions, private lenders often offer greater flexibility in terms of loan terms, repayment schedules, and collateral requirements. This flexibility allows investors to tailor financing solutions to their specific needs and investment strategies.</li>
</ul>
</li>
<li>Expedited Approval Processes:
<ul>
<li>Private lenders are known for their streamlined approval processes, which can significantly reduce the time it takes to secure financing. With 24-hour approvals and efficient underwriting procedures, investors can seize time-sensitive opportunities with confidence and agility.</li>
</ul>
</li>
<li>Customized Loan Structures:
<ul>
<li>Private lending enables investors to negotiate customized loan structures that align with their investment goals and risk tolerance. From adjustable interest rates to interest-only payment options, investors have the flexibility to craft financing arrangements that maximize returns and mitigate risks.</li>
</ul>
</li>
<li>Access to Non-Traditional Properties:
<ul>
<li>Private lenders are often more willing to finance non-traditional or unconventional properties that may not meet the strict criteria of traditional lenders. Whether it&#8217;s a fix-and-flip project, a distressed property, or a unique investment opportunity, private lending offers access to a broader range of real estate assets.</li>
</ul>
</li>
<li>Enhanced Investment Opportunities:
<ul>
<li>By leveraging private lending, investors can expand their investment horizons and pursue a diverse range of opportunities in the real estate market. Whether it&#8217;s acquiring new properties, funding renovation projects, or consolidating existing debt, private lending provides the capital needed to fuel growth and maximize returns.</li>
</ul>
</li>
<li>Personalized Service and Support:
<ul>
<li>Private lenders often offer personalized service and dedicated support throughout the lending process. Investors benefit from direct communication with decision-makers, responsive assistance, and tailored guidance, fostering a collaborative partnership that enhances the overall borrowing experience.</li>
</ul>
</li>
</ol>
Conclusion: In summary, the benefits of private lending for real estate investors are multifaceted and compelling. From greater flexibility and expedited approval processes to customized loan structures and access to non-traditional properties, private lending offers investors a strategic advantage in navigating the complexities of the real estate market. By embracing private lending as a valuable financing tool, investors can unlock new opportunities, optimize their investment strategies, and achieve greater success in their real estate ventures.

The Advantages of Private Lending for Real Estate Investors