This week’s issue presented by Ridge Lending Group
What happened…
The Fed cut rates again. Markets cheered. But affordability didn’t move. Prices are the choke point, not the APR. The typical U.S. home still runs about 5× median household income.
Takeaways…
$70,000: Roughly what buyers need for a median down payment. Most don’t have it.
80%: Owners with sub-5% mortgages. They won’t list, so inventory stays thin.
1%: A full point drop saves ~$200/month on the median loan—nice, not life-changing.
40%: Share of income a median payment now eats—above comfort lines in many metros.
2.6× → 5×: Price-to-income doubled from norms. That’s the real blocker.
Explain Like I’m 12…
Rate cuts right now are like cheaper tickets on a full flight — nice deal, no seats left.
What this releases…
Hunt the stale: Target listings with 60+ DOM or >5% price cuts—that’s motivation.
Terms > rate: Ask for 2–3% seller credits, buydowns, or rate-reset clauses on renewals.
Why it matters…
Winners: Cash-flow buyers and landlords; they can live with 6–7% debt if rents cover.
Losers: First-timers chasing rate headlines; policy noise won’t bridge a 5× price gap.
Backroom breakdown…
The Fed isn’t fixing housing; it’s calming markets. They know prices are political poison, but cheaper money helps Wall Street first. No one in D.C. wants to say it out loud, but the plan is clear: keep the stock chart happy, hope inflation fades, and deal with housing later.
Real estate angle…
Plan for low volume, higher spreads. Flips starve; holds and creative deals eat. Underwrite with today’s cap/sf, not tomorrow’s dream rate. If rates drift down, that’s upside. If not, cash flow still works.
Move or miss?
Move: Build a micro-list of owners with 2026–2027 maturities + insurance/tax jumps. Call this week with a simple offer: price + terms (e.g., small discount, seller carry at 0–2% for 12–18 months, balloon on refi).
Tools we use: PropStream (lists/comps) and DealMachine (fast outreach).
Need cheap funds? LoopholeLending.com for up to $150K at 0% intro—use it to lock deals, not to shop.
Secure long-term funding (RidgeLendingGroup.com) or get tactical support (CashFlowSavvy.com) before policy and Fed cuts push comps higher.
Lurking in the Shadows:
👟 Shutdown Turns Into a Power Play
Trump froze $26 billion in projects for blue states—everything from New York subways to green-energy builds. The move turned a routine budget fight into a raw test of federal muscle, leaving cities scrambling and construction sites idle.
💡 Why you should care: Political risk just became a market risk. Every stalled project means lost jobs, delayed materials orders, and cheaper contractors for investors who can move fast.
👟 Economy Flying Blind as Data Goes Dark
The month-long shutdown stopped major reports—no jobs, CPI, or GDP prints. The Treasury says the freeze is costing up to $15 billion a week in lost output. Without new data, traders are guessing, and the Fed is steering on old numbers.
💡 Why you should care: When the Fed can’t see, it overcorrects. Expect rate whiplash and mortgage volatility until Washington flips the lights back on.
👟 Big Tech’s Earnings Mask Real-World Pain
Amazon’s cloud arm jumped 20% last quarter, adding $330 billion in market value overnight. Wall Street popped champagne—but most sectors aren’t sharing the party. Tech strength hides weak demand in housing, autos, and retail.
💡 Why you should care: When capital crowds into tech, credit tightens elsewhere. That means less money for builders, startups, and property deals—and more opportunity for buyers who already have cash lined up.
On The Radar…
🥇 Gold’s Air Pocket: After a $4,381/oz peak, gold fell 6.3% in a day—flight-to-cash = forced sellers in other assets.
🪙 Bitcoin Whipsaws Again: Topped $126K, then slid ~18%—expect luxury splurges to pause and bargains to appear.
🏘 Inventory Creeps Up: Active listings hit 1.55M and 51 DOM—more price cuts; rentals still pencil better.
📈 Debt Interest Bites: Annual U.S. interest near $970B—crowds out spending, keeps rates sticky for loans and cap rates.
🏢 Office Stress Builds: CMBS office delinquencies at 11.7%—above GFC peak; real distress pipeline forming.
🇨🇳 China Slump, U.S. Relief: Golden Week new-home sales -33%—materials demand cools, potential cost relief for U.S. builds.
🖇 The Connection
This week looked bullish on the surface—stocks up, rates down—but it’s really musical chairs. Money’s shifting, not growing, and housing’s still standing without a seat.
The Fed cut again, yet the median home still costs ~5× household income and the average down payment sits near $70K. Offices are cracking, with delinquencies hitting 11.7%, worse than the 2008 peak. Even the safe bets got shaky—gold crashed 6.3% after a record high, and Bitcoin dropped ~18% in days. Meanwhile, the U.S. is paying almost $1 trillion a year just in interest, keeping pressure on rates.
It’s like water in a drought—it flows to the deepest lakes first. Wall Street gets filled up, but real estate and small business stay dry.
Rate cuts make good headlines, but they don’t fix high prices, taxes, or insurance. The real opportunities are showing up off-market—owners with loans maturing in 2026–2027, listings stuck 60+ days, or price cuts past 5%. The investors who move first with cash or creative terms win while everyone else waits for a “buyer comeback” that isn’t coming.
If gold and crypto keep swinging and the next data reports stay messy, watch for more people running to cash. That’s when the quiet deals start—slow at first, then fast.
#️Number of the Week
$970,000,000,000
What it is: America’s annual interest bill—now bigger than defense.
We’re paying yesterday’s tabs before we fund tomorrow.
🎯 The Hit List!
✅ Hunt — Listings 60+ DOM or >5% price cuts.
Payoff: These are the soft spots; press for credits and repairs.
✅ Target — Owners with 2026–2027 loan maturities.
Payoff: Call now; set terms before they hit the wall.
✅ Hedge — Gold fell 6.3% after a record.
Payoff: Keep dry powder; use dips to buy real assets, not memes.
✅ Watch — Office CMBS delinquencies at 11.7% (new high).
Payoff: Underwrite for more cap expansion; bid distressed only at a steep basis.
✅ Negotiate — Ask for 2–3% seller credits or buydowns.
Payoff: Terms move payments more than a 25 bps headline cut.
✅ Filter — Keep buy boxes where rent covers 6–7% debt.
Payoff: Cash flow first; any future rate drop is gravy.
🚪 Closer
Powell cut rates; Zillow didn’t cut prices. Funny how that setting’s missing.
