Summary The Fed is expected to cut rates at its September meeting—so what changes for investors now? Kevin and Steve break down why mortgage rates don’t simply copy the Fed, how HELOCs/Prime respond first, what rising confidence does to demand and prices, and why acquisitions are still excellent with concessions and smarter buydowns. Plus, a quick reminder: it’s better to be good than to be “right”—in real estate and in life.
In this episode of the Moneyball Real Estate Show, Kevin Clayson and Steve Earl discuss the anticipated interest rate cuts by the Federal Reserve and their implications for the real estate market. They reflect on recent events that have impacted their community and emphasize the importance of dialogue over being right. Kevin and Steve explore how changes in interest rates can affect buyer demand, consumer confidence, and the overall economy, encouraging listeners to consider investing in real estate during this favorable environment.
Listen for:
• Fed cuts vs. mortgage rates (not the same thing)
• Why HELOC/credit lines feel relief first
• Demand, prices, and the “seesaw” effect
• Why “today” beats trying to time the market
• How to pressure-test your own portfolio and next purchase
Get a personalized game plan: kevin@dfy-realestate.com (subject: “Game Plan”)
Takeaways
Chapters
00:00 Introduction and Excitement for Updates
02:06 Reflections on Recent Events and Importance of Dialogue
07:37 Anticipation of Interest Rate Cuts
11:26 Impact of Interest Rate Changes on Real Estate
19:24 Consumer Confidence and Market Dynamics
25:35 Conclusion and Call to Action
All right, well, hello, everybody, and welcome to the Moneyball Real Estate Show with Kevin and...
Steve, how's it going, Kev?
man, it is fantastic. Let me tell you why it's fantastic. Because right now, my phone is in the middle of downloading the newest iOS update. It's updating to iOS 26. It just came out today. And whenever my car, my Tesla downloads an update or my phone downloads an update, it feels like finding money in the couch. Do you know what I'm saying? It just feels exciting. I feel like I'm getting something for free. I don't have to work for it. It just shows up in my life.
Wait a minute, you're saying that this is iOS 26?
Yeah.
Man, I think I'm like on 16 or something.
Yes, you probably are, but it's because their most recent update was iOS 18 and they've decided now since they usually release a new iOS once a year, they've decided that they're gonna try to make it so they're releasing iOS 26 as we look towards iOS or 2026. So that's kind of the idea, kind of like they do with cars.
Okay, good, cool. I thought I was like really far behind, but either way I need to do an update on my phone as well.
You're like, how is my phone still working? I'm so far behind. Yeah, no, that's, that's, but no, things are good. Things are good. I'm excited to be here with you today. I'm excited for the show. So today, everybody, we are going to talk about something that we know is on everybody's mind. And, you know, we're going to talk a little bit more about interest rates. Now, here's why we're to
Yeah.
today, right, the day that this podcast is being released on September 16, 2025, the Fed is supposed to be cutting interest rates. And so we wanna talk a little bit about what does that mean? What is it gonna mean for buyer demand? What is it gonna mean for the real estate market? What is it gonna mean for you, for your portfolio, and for what's next? And Steve, if I may, before we dive in to interest rate stuff,
Can I just take a slight temporary departure with your permission?
Yeah, of course. Go for it.
So for those of you listening, Steve and I, our office is here in Orem, Utah. I live in Orem, Steve lives in Pleasant Grove, which is not far. And our little city made international news last week with the political assassination of Charlie Kirk here in Orem. Now the only reason why I'm bringing it up is to me it is,
in fact, a watershed moment in US history. Those of you listening, some of you may agree, some of you may disagree. All I want to say is this. This is something that I shared with my children, that I shared with those that I teach yesterday at church and something that I just wanna share here on the podcast.
As the events unfolded over last week, I know Steve Earle and I, we both felt very heavy hearts. We sat in my office and we were watching the coverage, just jaws on the floor, couldn't believe what we were witnessing. And since then, there's been a lot, I mean a lot of talk. There's been people that have been reacting in every way under the sun. There's opinions that have been flying at everybody through
all kinds of means. The idea, the thought that has come to me again and again, and what I just wanna share at the top of this podcast, is my friends, if you are listening, I want you to know that it is more important to be good than to be right. And what I mean by that is we've...
entered a time in our country's history where everybody is so committed to explaining how right they are about everything, that they must be validated, that what they believe and how they believe, everybody has to agree with it. And in the event that we disagree, we've entered a space in our country's history where those who disagree are no longer allowed to communicate with each other.
Which is insane. I had a very good friend of mine, somebody that I think I've even talked about on this podcast, who he was the first manager I ever had. was somebody who's been a light in my life and he unfriended me on Facebook, but he thankfully wrote me a message ahead of time and just said, I love you, I've followed you, but we can't be friends anymore because he and I differ a little bit on.
how tragic those days' events were. I thought they were tragic, he did not. And because of that, he had to unfriend me. My response to him is what my response would be to everybody here, that it really doesn't matter if we disagree as much as it matters that we talk. And one of the things that Steve and I are really committed to on this podcast is talking.
That's all this is. We know that some of you don't agree with the way we look at real estate. Some of you don't agree with the way that we look at wealth or wealth creation. Some of you don't agree with maybe a billion different opinions that we have. Some of you do agree. But my hope and my encouragement would be, what if we just stop being so concerned about being right and proving that our point of view is right and that our point of view is valid and that if we disagree with anybody, we can no longer have discussion.
and let's just create the forum that allows us to discuss and allows us to learn. I will tell you, there's many times when Steve and I have jumped on this podcast and you guys probably feel that he and I are very united in what we share. And I would say in large part we are, but one of the things that I love is if I bring up a point, there's times where Steve will say, I'm actually, let me disagree with you a little bit there. And I go, I lean in and I go, ooh, what's he gonna say?
And I think there's been times when Steve has shared something and I say, you know what? I actually look at it a little bit different and Steve leans in. Why? Because it is the promotion of this type of dialogue, regardless of whether it's political, religious, real estate related. It's the idea that we lean in and listen that is far more important than proving our point. And I just wanted to share that with everybody that it's better
to be good than to be right. So I just wanted to share that. Steve, I don't know if you have any thoughts on that, but I just wanted to kind of throw that out there.
Hey, Kev, can you hear me? Okay, great. You disappeared on my video feed and I can't hear you anymore except through the wall. We're in the same office space, but your office is on the other side of a wall. So anyways, I heard everything that you said and I really do agree with that premise, with that perspective. Thanks for sharing that. We didn't plan to even have that.
Yes.
to come up as a topic, but as we started the podcast, I kind of wondered to myself, it's like, man, we just kind of say something about the massive elephant in everybody's room right now? And I really appreciate you sharing that. I feel like that is a very healthy perspective. So much appreciated, thanks, Kev.
Well, okay, so we're gonna get into the topic here. And I know the technology that we're using, I'm hoping that it will pop on. Steve, maybe see if you can even drop off and come back on and maybe you'll hear me if that's the case. But for now, I'm just gonna start talking a little bit about what the topic is today. And the topic today is the fact that we know that the Fed should be
lowering interest rates today, right? They should be meeting today. And it is anticipated that the Federal Reserve is gonna cut interest rates, kind of driven by concerns over like, know, weakening labor market. And inflation is still, you know, probably not as low as, you know, everybody wants it to be. But I think the Fed understands, and I think President Trump is really pressuring the Fed.
to lower the interest rate. And I'll say that most analysts are anticipating like a 25 basis point reduction. And now what's interesting about that is, and this is what we really wanna talk about from a real estate standpoint, is that even if interest rates decrease by the Fed, that does not necessarily mean that mortgage interest rates are gonna also magically just decline today. And part of that is because
the lowering of mortgage interest rates has already been baked in to the process. In fact, we saw interest rates lower last week pretty solidly. mean, we, you right now, if somebody is buying real estate and they're willing to buy down the rate, you know, three quarters of a percent, which can cost a few thousand dollars, which largely comes through seller concessions, you are absolutely closing on your real estate purchases
below 6 % in the 5 % range. Now, in the 5 % range is a really quite amazing interest rate when you consider it. was just, my daughter works at an awesome burger place that's here in Orem, Utah. And what's the owner of it, they've got a number of stores and he and I always talk. We talk football, we talk business, we talk life. He's a great guy.
And he was talking about the fact that he is doing this whole remodel on his home. And he's doing it because he doesn't wanna have to pay somebody else. He has a licensed contractor as well as he owns restaurants. And so he was just kind of sharing that with me. And I was telling him what we're doing on the real estate side. He's never really asked me questions about exactly what we do and the kinds of properties that we look for. And I told him, we're doing property purchases that are,
below $300,000 and we were buying properties back during the crash, because he talked a little bit about the crash, that that's when he got his contractor's license. And I'm talking about like the 2007, 2008 crash. He got his contractor's license then and he was gonna be full-time contractor, but then the market was impacted and that's kind of why he went into the restaurant biz, but now he's kind of getting into construction again. And I was telling him like,
you know, yeah, this is what we do. This is the kind of purchase prices that, you know, we're looking for. And he said, he said, holy cow, that's incredible. And he said, you know, five to 6 % interest rates. He's like, that is not a bad interest rate. And I was like, I know. And I told him that interest rates had declined recently. And really the reason why interest rates had declined is largely in response to this thought that the Fed is,
largely in response to the fact that the Fed, in preparation for lowering these interest rates, the mortgage market has really already reacted, okay? And so we have already seen interest rates start to decline. And what that means, I don't know that that necessarily changes anything for us on this podcast. We've been telling you that it's always the right time to buy.
And we've been telling you that regardless of what interest rates are, it is absolutely something that you should be, you know, working towards your next investment purchase. But Steve, just, you know, based on how you're viewing everything that's going on, based on knowing that the Fed is likely dropping the interest rate today, but that we've already seen interest rates take a little bit of a dip and a little bit of a decline. And that's already having an impact on mortgage interest rates that people are buying with.
right now, just what are your two cents? I know you track this stuff closely. I know that this is something that we watch really closely, but let's just kind of share with everybody what our thoughts are on the fact that we are seeing these interest rates already start to come down. Yeah. No, I think that what we're gonna see is when the Fed actually drops the rate on that day, I mean, we never know exactly what's gonna happen to long-term 30-year
mortgage interest rates, but it's likely that they are already baked into the interest rates. As you mentioned, that interest rates have dropped in the last couple of weeks on information that the Fed is going to drop the rates. So it's not likely that long-term mortgage interest rates are going to be affected in one way or another. In fact, we've mentioned this before, but the last time the Fed dropped the rate, people reacted positively and they started putting homes under contract.
but the reality is is interest rates actually went up. where I see the greatest opportunity, the benefit to what's gonna happen in the market is that the Fed dropping its rate is going to affect other things more positively than long-term interest rates.
It affects like HELOCs. HELOCs are variable and they're tied more directly to like when the Fed actually drops their rate credit cards, commercial loans for companies. And so based on that, where I see the more positive effect in the economy is that people are gonna have a little bit more wiggle room again. Like right now, if you had a HELOC and you got it, you had like an interest rate of like three or 4 % and then over the last couple of years,
like rates have gone up dramatically. Your interest rate is probably like 10%. Maybe it's dropped a little bit lower since the rates have come down. Because a lot of the HELOCs are variable rates, right? So they kind of move with some of the indexes that are more closely tied to the federal reserve rate than say mortgage interest rates are in a traditional way. Exactly, HELOCs are typically variable. Same thing with the credit cards, same things with commercial loans. And so for businesses, that's gonna free up some opportunity for homeowners.
it's gonna lower their HELOC payments dramatically, which gives them a little bit more wiggle room in their ongoing budget. mean, budgets got really tight for people, like individuals who had HELOCs and the rates went up, their payment went from say, a few hundred dollars to like higher than a thousand dollars. And so like hundreds of dollars higher, depending on how much your HELOC was for.
I know I experienced that personally. went from literally a few hundred dollars to actually a few thousand dollars. So that pinched my budget in a significant way. And so as those rates go down, creates more wiggle room, creates more confidence, more ability to do other things, both for individuals, homeowners who have HELOC, to businesses who now can go out and afford to get loans to grow their companies and to increase operations, increase headcount, that kind of a thing.
And so I think it's gonna affect the economy in a very positive way from that standpoint, more so than just all of a we're gonna have low long-term interest rates. Well, and I think for me the real impact is that as soon as everybody goes, the Fed's gonna lower interest rates, whether the Fed lowers the rate or not, right, in anticipation, because of that news, because we are reactionary emotional creatures,
and we're in large part reactionary, emotional consumers and buyers and dare I say it, investors, even though we try to have an investor mindset, all of us are emotional creatures. So what you see is you see this impact economically, like worldwide and especially in the country that if there's an increase in consumer confidence. Now, what's really interesting about that term, consumer confidence,
We're not saying an increase in consumers ability to buy. We're saying an increase in consumer confidence, which just means somebody feels more warm fuzzies. That's literally, we're talking about the entire economy hinging on the warm fuzzies that all of us feel and that then guides behavior and that behavior may be, wait, I feel more confident because I feel more confident that the feds lowering the interest rate.
I'm more likely to buy, I feel like the economy is trending in the right direction, so maybe I'll stop sitting on the sidelines and I'll enter the fray. And what that's gonna do, and this is where it really impacts us and all of us listening, is that increased consumer confidence, the increase in the warm fuzzies, is gonna increase buyer demand, and that increased buyer demand will have an impact on the kind of real estate that we see and that we do. Yeah, exactly, on real estate and...
everything else. People are more willing and more, they feel better about going out to dinner. They feel better about buying, know, upgrading their vehicle or buying a recreational vehicle because they know they're going to get a lower interest rate or they just simply feel more positive about it's like, hey, you know, my company is going to do better. There might be an opportunity for me to get a raise or a promotion as opposed to being fearful that I might lose my job. So
I've gotta batten down the hatches and I've gotta live on rice and beans, I gotta be way more careful. It just creates that, like people make more decisions, even financial decisions, based on how they're feeling. What's Mike saying that he says all Personal finance is more personal than it is finance. Exactly, so it's all about like the individual, how they're feeling, what's important to them, and when...
kind of the economic indicators change like across the board. It just starts to loosen things up and the economy flows more freely. Now the other thing that's kind of interesting and where this has an impact I think on us as investors, on you guys listening as investors is if the Fed cuts the interest rate, which we're anticipating, if we see some of that reflected in mortgage interest rates, which we have already seen and may see more of, we don't know.
But what's gonna happen, that increased consumer confidence also comes, this is the other thing, is not so much on the investment side, but there are lots and lots of people out there that are sitting on the sideline continuing to rent or holding off on moving from the home that they're in and upgrading to a new home because they're worried about the new payment that they would take on. Well, if the interest rate is lower,
on mortgage interest rates. Now that person is more likely to move from renter to potentially buyer and buying a primary residence. It also may mean that some people are now more willing to sell their property because they believe that the new payment they'd have on their upgraded, know, primary residence that they move into is gonna be more reasonable. And so that is a real tangible impact.
of these lower interest rates that yes, there's increased consumer confidence. What that could mean is that may increase buyer demand. That increased buyer demand may have an impact on pricing, which is the other part of this, right? It's kind of like a seesaw. It's like interest rates go down. Well, prices may go up. Prices go up, interest rates come down. More people want to buy, prices go up. Like it's kind of this seesaw that we're constantly playing. And because it is always a moving target,
That is why Steve and I always say, now's always the right time to buy. Because we can never know if tomorrow's a better day or if yesterday was a better day, which is why we always need to buy today, because there's always going to be things in the economy that are a good reason to buy right now. And so if that's the case, an increased buyer demand, people feel like they can qualify for the mortgages better. How does that impact
us, how does that impact you and your portfolio? It could mean a couple of things. Number one, it could mean that there's more inventory potentially that comes onto the market. If people are saying, my gosh, I'm ready to sell and go upgrade my home. Maybe there's some more inventory, but we probably are going to see an increase in prices, which for the portfolio that you own, you may see some equity increase. Equity increases even been fairly, you know,
let's just say it hasn't been blow your socks off, know, holy cow, I just became wealthy overnight type of appreciation. It's been relatively modest, right? And so maybe we see a little bit more appreciation, which helps your portfolio. But now the other side of that is now as you're going to buying, maybe we're having to buy at slightly higher purchase prices, but if the interest rates a little bit lower, maybe it still makes sense, right? There's all of that stuff that we have to take into consideration.
And what I'm trying to say to all of you is, you don't need to worry about all of the ins and the outs. What you need to worry about is this, there is positive things that are coming and it is all the more reason why you should be buying right now. Yeah, Kevin, here's the last thing that I'll kind of add to this conversation. And that is, one of the other things that we've seen is that rents have not been keeping up with price increases. Definitely. And part of that is because of the consumer
Like this, how do you say it? Unconfidence, not being confident in the economy. Doubt, kind of a thing. that has permeated throughout businesses across the board and businesses have been very reticent to increase people's wages. Kev, at this point, the only way to kind of get out of this doom cycle that we're in where inflation is outpacing everything or that
home price is outpacing rents is that people can't afford the higher rents, but if they were earning more, then they could. And if they're earning more, they could afford a higher home payment as well. And so the point I wanna make here is that with increased consumer confidence, business confidence, confidence in a company's belief that they can continue to grow their business and attract more people, that's when they raise wages.
The other thing that's been lagging are wages. Wages have not gone up commensurate with inflation. with increased, with things kind of loosening up again, that's the other, I think that's the other piece to this puzzle that's gonna make one of the biggest differences in our ability to feel confident in continuing to invest in real estate and continuing to do everything that we do, right? Across the board, knowing that people's wages
will continue to go up to meet the increases in overall inflation, including rent increases, which is an important thing because as investors in real estate, we have seen, and we can see across the board based on the statistics that we look at, the data that we look at is that rents have not been increasing over the last couple of years like they normally have compared to the previous three years prior to like 2022.
And so that's one of the other factors that I think is going to kind of break free, which again, I love that you're kind of pounding this idea because we've been hitting it pretty hard over the last three years is that, gosh, like now is such a good time to buy because of all the things that we've been talking about forever. We don't need to go into all of them again, but the idea that right now there's lower demand, less competition, sellers giving concessions.
and everything that goes along with being able to acquire the real estate when the acquisition opportunity is good, maybe even excellent, which is the case right now. It just simply is the case. We've added six properties to our portfolio in the last literally eight weeks, and it's been a very fun process actually to go through because of the buying process, the concessions.
the appraisals coming in higher than the contract price. And the fact that we didn't have to compete against other buyers, no multiple offers, that kind of thing. It's been like a really cool, fun, not stressful situation. it's been awesome from that standpoint. No, yeah, for sure. So look guys, end of the day, here's the deal.
Interest rates are likely coming down by the Fed. We've already seen that impact in mortgage interest rates. We may see it some more. We don't know. With all of that, we got increased consumer confidence, but that's also gonna increase buyer demand. But it may mean that mortgage payments are slightly more affordable, which is part of what's increasing that demand, which means we may see some more homes come on the market, but it also means that we're probably gonna see some appreciation. And it does.
also mean that maybe businesses are more likely to spend some money to take out some additional loans, to increase liquidity, to possibly rising wages, which may have an impact on rents. So all in all, it's really a good environment to say, we like where we're at, we like where it's going, we 100 % should be diving in right now. So let me just say this as we conclude the episode.
If you are just curious, right? You're like, well, what would it be like? And this especially for our existing clients. One of the things that I've changed recently that I'm really excited about is if you have real estate, and I would even make this offer if somebody's listening and they're not a client. If you have real estate and you're trying to get a feel for where is my portfolio, what could be next? What should I expect moving forward?
if interest rates come down, just kind of seeing the entire macro perspective of what's going on. Reach out to me. I am happy to put together some options for you. I'm happy to look at some numbers. We can absolutely dive in and not just give you a generic kind of idea of like, hey, things are pretty good or you should be fine. But what if we could have a personalized conversation talking about your portfolio, talking about the properties you've either bought through DFI or outside.
If you are not a DFI client, we could have a conversation of what could be next for your portfolio. If you are a DFI client, we could talk about what's next for your portfolio. I'm such a big fan of just having the information so that I can then make decisions that are right for me and for my family. So my encouragement to you all is if you would love to just get together and look at what's going on, you can email
gameplan at dfy-realestate.com. we will, or even better, think it, do kevin at dfy-realestate.com. That way, I know it comes directly to me. Feel free to email me kevin at dfy-realestate.com. And let's get together. Let's just talk it through. Let me give you an idea of what it could mean for you, for your portfolio. Any final thoughts before we wrap the episode, Steve? Yeah, no, Kev.
Not really, I'm just excited about, like, I'm excited about the market generally speaking. Like everything that I just spoke about, I'm excited about all of those different factors because aside from being real estate investors, we're also business owners. And that's a big part of what we do. And so I'm excited about things loosening up. I'm excited about people being more confident about, you know, just their own personal lives, their own personal financial opportunities.
And of course, I'm excited about the opportunity to continue to build our own personal portfolios and help our clients do the exact same thing. You know, it's, it's, I've always said it's fun to be in business, but it's even more fun when you're able to do something that you love and you're doing something that is truly, truly in a significant way, making a difference in people's lives. And you and I've had this conversation many, many times.
where we just sit down, we talk about individual clients and the transformative change in difference that this has made in their lives. From literally just not having that confidence about what the future's gonna hold to being in the position where they've been doing it long enough, they're now experiencing the fruits of the faith that they put in to investing in real estate, knowing that it was gonna take 10 years to get where they wanted to go.
but also knowing that if they hadn't done that, they couldn't have accomplished in 10 years what they haven't been able to do in the previous 30 years combined. it's pretty fun to be in this business. It's fun to be doing some that we absolutely love to do. And it's fun to have these conversations with our clients and with our potential customers in the future. And so I just say, hey, thanks for listening. Thanks for being a part of what we're trying to do, what we're striving to be.
And, you know, man, let's just keep keep rolling. I love it. I love it. Thank you, everybody, for tuning in. Remember, try to just be good to each other. All of us. That is the directive. No matter what, with without real estate and finance, it's our job to be good to each other, to love one another. I don't know that there's a more important conversation in the world, but this real estate conversation is pretty fun, too.
So we appreciate everybody being here. Thanks for tuning in and we'll see you next week. Thanks for listening.