Zelman's Alan Ratner on if housing will make a comback in 2026

Leslie Picker (Senior Reporter) 00:00.070

and home builder sentiment still negative even though it inched higher this month but national economic council director kevin hassett said the trump administration will share plans for affordable housing in the new year so could the housing market recover next year or will that

Leslie Picker (Senior Reporter) 00:14.870

weakness continue joining us now is alan ratner from zelman a walker and dunlop company OK so we had this conversation with kevin hassett earlier and i was kind of probing him on what types of options they're really looking into he declined to to answer said that all that

Leslie Picker (Senior Reporter) 00:33.070

information will come out later but if you were advising this administration if you were discussing the options that were most viable here to improve housing affordability what would they be

Alan Ratner (Managing Director) 00:44.440

good afternoon leslie thanks for having me you know it's it's really a complicated issue there's a lot of attention being spent here and and thankfully you know from what we hear the the conversations between the administration and the industry are collaborative they're being

Alan Ratner (Managing Director) 01:00.760

productive and and we're hopeful that something can come out from these discussions that can move the needle but the real challenge that we've seen is you know that the real bottlenecks the real inflation is occurring on the local municipality level whether it's related to

Alan Ratner (Managing Director) 01:16.070

impact fees delays in approvals and development timelines and you know unless the federal government you know gets a little bit more comfortable wading into local politics we think that anything done on the margin might be beneficial but it's hard to really make a huge dent

Alan Ratner (Managing Director) 01:32.470

without the local involvement well

Leslie Picker (Senior Reporter) 01:34.670

one thing that is done at the federal level at the federal reserve that is is controlling interest rates do you see any type of unlock that could come from more dovish dovish positioning going into twenty twenty six

Alan Ratner (Managing Director) 01:48.350

well it is complicated because the fed controls the short end of the curve and the thirty year mortgage rate is is really priced off of the ten year treasury yield which you know that's a function of a lot of things including inflation expectations the the deficit and what we've

Alan Ratner (Managing Director) 02:04.070

seen up to this point even though the fed has cut several times here is that we haven't necessarily seen a commensurate move in in the thirty year mortgage rate so there's there's things that can be done to improve rates whether that's looking at llpas loan level pricing

Alan Ratner (Managing Director) 02:18.160

adjustments having potentially the fed continue to buy MD 's to tighten that spread versus treasuries and we think all of that is on the table and it's in many cases already occurring but i'm not sure that anybody hoping for a huge reduction in mortgage rates is is likely that's

Alan Ratner (Managing Director) 02:36.190

unlikely to come to fruition in twenty six right

Leslie Picker (Senior Reporter) 02:39.030

what about tariffs just kind of brainstorming all the different possibilities here how have tariffs played a role in lumber prices and just the cost of materials to struct homes how is that impacting supply and if there were some sort of reversal on tariffs would that make a

Leslie Picker (Senior Reporter) 02:55.150

dent

Alan Ratner (Managing Director) 02:56.670

yeah i mean that's probably one of the good news pieces of good news that we've seen this year there was a lot of concern that incremental tariffs would raise the cost of producing homes anywhere between five thousand dollars and ten thousand dollars per door that's what a lot

Alan Ratner (Managing Director) 03:11.230

of the builders communicated to investors earlier this year and what we've actually seen is at least a large public builders have been able to use their size use their scale to actually push back on the trades push back on the manufacturers and suppliers and and really keep

Alan Ratner (Managing Director) 03:26.750

those tariffs downstream so we haven't seen that flow down to the home builder and we really haven't seen it flow to the consumer if anything new home prices have been on the decline this year when you include the benefit of incentives like mortgage rate buy down so i'm not sure

Alan Ratner (Managing Director) 03:41.870

reversing tariffs would necessarily be a benefit for the consumer it might be a benefit for the the suppliers and the manufacturers that have eaten those added costs this year