Market Movers: Unpacking Housing Economics | March 3, 2025

Olivia DeLancey: 00:01:01

Welcome to Optimal Insights, your weekly source for real time rate data and expert capital markets commentary brought to you by Optimal Blue. Let's dive in and help you maximize your profitability this week.

Jim Glennon: 00:01:15

Welcome to Optimal Insights, your weekly source for timely market analysis and expert commentary from Optimal Blue. I'm your host, Jim Glennon, Vice president of hedging and Trading Client Services at Optimal Blue.

Our clients and industry partners have long relied on Optimal Blue for trusted insights and commentary, and these podcasts are an evolution of our commitment to keeping the industry informed. Let's dive into today's episode. Welcome everybody. Today is Monday. We've got another great show for you today.

First, as always, we'll talk through some current events and some economic indicators with Ben here in a moment. After that, we have a guest with us, Olivia Delancey from Optimal Blue. She is the host of our Market Advantage podcast.

So we'll talk a little bit with Olivia and she. She was also at the Housing Wire Housing Economic Summit with me and a few others last week.

So we'll talk through some really cool topics that we covered there in our session, but also some interesting sessions that we attended at that really good conference last week. Just a little bit of data to talk about this morning, the obmmi. So the conventional 30 year is approaching six and a half, so around 6.6 right now.

So the lowest we've seen so far this year. And that's definitely been driving volume.

were seeing Pre pandemic. So: 2019

Jeff McCarty: 00:02:44

Yeah. So down about half a point, almost half a point from the highs, at least. So we had peaked early mid January at over 7%.

So trending in the right direction, certainly.

So, you know, between rates moving in the right direction and probably a little bit of seasonality, as well as no natural disasters here over the last several weeks, probably some stability in that regard. So all those things kind of helping us trend in the right direction for volume is good news.

Jim Glennon: 00:03:12

Yeah, yeah. There was an overwhelming theme at the conference last week that 6% is the number.

The closest closer we get to 6%, you really start to see activity pick up not just in refis, but in purchase volume as well. It's just kind of a. I think some of it's psychological, but some of it's also math.

I think loans become more affordable at that point for buying a new home. But you also see some of those seven, seven and a half interest rates interested in, in trading down.

All right, let's go check in with Ben, see what's going on in the world. All right. Welcome Ben, resident oracle on the desk here to talk a little bit about what's going on. It's, it's, it's unemployment week.

Always an exciting week in terms of all the data that surrounds that. What else is going on?

Ben Larcombe: 00:03:54

Yeah, yeah, not too much other, other than that we do, we will have ADP payrolls this week, the, the less important cousin of, of non farm and then ISM services Wednesday. But I think a lot of the headlines might somehow gravitate towards Canada, Mexico and additional China tariffs that seem set to go into effect.

We'll see if there's a last second change to that and maybe there's some negotiations happening as we speak here that maybe those won't go into effect and maybe we'll see some market moves off of that. But yeah, that jobs report next week we have February's CPI and ppi. So those will be the big things to keep an eye on for this week for sure.

Jim Glennon: 00:04:38

All right, so what are we expecting? 160,000 jobs. That sound about right? So a little above where we came in last month, right?

Ben Larcombe: 00:04:46

Yes. So pretty solid number still. There's definitely a varying consensus. One thing we do know is unemployment could tick up a little bit.

We hope wages are cooler than they were last month. It seems likely that they will be. If not, that could be an issue for sure. The, the doge cuts that we've seen are unlikely to be reflected yet.

I think a lot of that's going to happen, you know, potentially in the next report. So once we're looking at March's report in early April or even beyond that, just depending on some of the technicalities of those job cuts.

But February is typically a strong seasonal adjustment downward because state and local governments tend to hire more in February, kind of coming off of the slower winter holiday months. So there actually tends to be a pretty strong downward push that, that you get from that. So we'll have to see what it, what it looks like.

I know Jeffries, for example, I think was calling for well below that 160k number. So we'll see, we'll see how it shakes out early on Friday morning.

Jim Glennon: 00:05:54

All right. Yeah, still, still at least in the private sector, in the more white collar type jobs, still a difficult market.

But if that number stays around 4%, the Fed doesn't really have any reason.

Ben Larcombe: 00:06:08

To move Right, right, exactly.

And as we're kind of going to touch on here, when we look at some of last week's data and some things that are going on, it seems like the inflation side of the equation is going to keep them on hold, potentially. We'll see. We hope we're wrong. We did get PCE that came in last Friday. You know, it came in at 2.6% year over year, 0.3% month over month.

I believe it was actually like 0.26% month over month. Of course, they round that off. So maybe a little bit better than even that number indicates.

But even within that, personal incomes were higher than expected, even though personal spending actually dropped 0.2% or 0.5% drop if you account for inflation. So some signs the consumer is pulling back. Yet we still have these inflation readings that are running quite hot.

So, yes, kind of we're in a little bit of a weird spot. I don't want to say the word stagflation. I mean, I guess I just did.

But signs of a, of a slowing economy while prices continue to run a little bit hot, which is not ideal.

Jim Glennon: 00:07:22

No, it's a brutal, brutal economic situation to be in. I know, you know, Japan spent many years in that situation and obviously, yeah, with, with very little growth, but just rising prices.

That's, those are, there's, there's no fun there.

Ben Larcombe: 00:07:35

Right. Yeah, it's, it's kind of the, the worst of both worlds.

Jim Glennon: 00:07:39

Yeah.

Ben Larcombe: 00:07:39

I guess the good news is inflation. I don't think we're going to see inflation jump to 8% again or even above that. We're just kind of sticky here.

Three, maybe a little bit higher percent. So it's not super high inflation, but certainly above the Fed's target. And we'll see how constraining that is in allowing them to cut rates.

Are they going to try to cut rates? Even if inflation does remain a bit above target here, it's certainly on the table.

Jeff McCarty: 00:08:07

I think I saw one of, one of the main kind of lagging components of some of the inflation numbers is rent, or what do they call it?

Jim Glennon: 00:08:16

Owner's equivalent rent.

Jeff McCarty: 00:08:17

Owner's equivalent rent. Right. And that's still a little bit higher.

But I think there's, you know, we can tell across the economy just from, you know, as we talked about in the intro, rates starting to decrease, some other factors. I don't think we'd be surprised if, you know, rents start to. Rent increases start to slow here. Coming. So as a lagging indicator, that's good news.

And supports the fact that inflation will continue to come down here.

Ben Larcombe: 00:08:44

Right? Yeah. And that's, that's something I think that gets lost in a lot of talk about tariffs is that's mostly going to affect goods that we import.

And so you really got to look at inflation, like how much of inflation is goods and goods that we import. It's really not a massive amount.

So you really got to look at rent and owner's equivalent rent and some of these things that are a pretty large weight in the CPI and PCE index. So yeah, that's a great point. Rent.

Like if you look at live rents and their various measures of that, like what current market rents are like, they've come, I don't want to say they come down everywhere, but they've, they've cooled off of their growth rates. Right. Like they're have basically gone, you know, less than inflation here for a while.

It's just the methodology within the rent measurement and owner's equivalent rent is lagged out because not everyone is renewing their lease at one time. So we're still seeing rent increases that happened a couple years ago filter through into the data.

So yes, over the next year we should continue to see those measures trickle down. That should continue to help us. It's just taking quite a long time for that, that lagging indicator to, to hopefully help us out there.

Jim Glennon: 00:10:05

Yeah, that's good news. And obviously it makes a lot of sense again with, you know, the, the labor market being soft in certain areas.

The average consumer is overextended at this point in terms of credit.

So, so we're spending is slowing down and we, and it didn't make sense to go on infinitely just paying more every time you sign your lease, you know, more a higher, higher percentage of, of rents going up. So it does feel like we're, we've, we're seeing that start to flow off.

Ben Larcombe: 00:10:32

Right? Yeah, definitely good news there.

I know anecdotally in Denver, I think Denver's got a ton of new units that have been built and I think rents have, have outright dropped in Denver and right now is kind of like kind of the bottom. So if you're looking to rent, it's probably a great time.

Or if you're, you know, if you're shopping for a house and you got to compare that to what your rent might look like. The rent is probably looking really attractive right now. So again, that'll continue to, to filter through.

But yeah, we look on kind of the, the consumer sentiment side. We, it's hard to put Too much stock in some of these numbers because I think a lot of it is survey based which you always got to put an asterisk on.

But readings last week that were quite weak, both the conference board, the University of Michigan and then even within that, that PCE release a lot of concerns about consumer sentiment and spending data which the consumer is a massive part of the economy. So definitely highlighting some concerns around growth and that's really why we've seen this rally over the last few weeks.

And Atlanta GDP now tracker is now showing a negative 1.5% real GDP growth rate which I think a couple caveats. It tends to be very volatile and we've seen these. You can see some weird headlines off of that too.

So I don't want to put too much stock in it but definitely highlights a pretty sharp downward revision in growth at least in that tool. It should become more accurate later in March as we get towards the end of the quarter.

It should get close to what we're actually going to see GDP come at. But it was at 2.3% before so saw a massive revision just this last week. Yeah, yeah. Fell off a cliff.

So again don't, don't put too much stock in it but certainly kind of highlights the overall growth concerns and that does have the market at least thinking we're going to get a couple cuts this year again we'll see if, if the inflation picture allows the Fed to cut two or three times this year.

Jeff McCarty: 00:12:39

Just looking at the CME rate watch futures, we're up to about 33% thinking that there will be at least one cut over the next two meetings by May 7, which is up from even a week ago. We were at about a quarter about a week ago. So starting to trend in that direction of what you just mentioned, Ben? Certainly.

Ben Larcombe: 00:13:00

Yeah, yeah, yeah.

And I think the first like the probabilities are suggesting like June could be the first, the first shot, then maybe again in September and then a little bit of potential for a November December. But we know those odds move quite a lot so we'll see.

I think we'll have a totally different picture come non farm payrolls this week and then CPI next week and yeah hopefully you know, at least for the mortgage industries interests that rates kind of at least hang in there as long as we don't give back a lot of this rally that I think would be good news even if we don't rally substantially further.

Jim Glennon: 00:13:36

Yeah, just a lot to think about right now but it does feel like we're turning a corner somehow and you got to wonder how much of it is a self fulfilling prophecy.

Back to your point about consumer confidence, but the consumer being, I think the numbers, roughly 60% of GDP, that's a major influencer that could take us from being positive to being negative if we suddenly stop spending. And on top of that, we start losing jobs and that, that can, that those two can be correlated as well. Right.

If we stop spending money, businesses don't do as well and have to lay people off.

So, yeah, it feels like the second half of the year is a bit of a wild card, especially in the context of some of the chaos of the new administration and tariff talk and, and other ways that the new administration is trying to like shock the economy into hopefully good things, but you know, making some major changes right off the bat here in this first quarter.

Ben Larcombe: 00:14:25

Right, right. Yeah, it'll. It'll be interesting to see how it, how it plays out even. Yeah.

Just the thought of job losses can keep people on the sidelines, can keep businesses on the sidelines of, okay, where's this economy headed? And if, obviously, if enough people cut back on spending or hiring because of that, then that can certainly lead to a recession.

Jim Glennon: 00:14:47

Right.

Ben Larcombe: 00:14:48

We'll see how the jobs report comes out this Friday and see where we're at.

Jim Glennon: 00:14:53

Sounds good. All right, thanks so much, Ben. You bet. Okay. As promised, co host of Market Advantage podcast, Olivia Delancey. Welcome.

Olivia DeLancey: 00:15:03

Hey, Jim. Hey, Jeff. It's great to be here. Thanks for having me.

Jim Glennon: 00:15:07

Thanks for taking some time on Monday morning to talk with us. As I mentioned, Olivia and I attended the housing wire Housing Economic Summit in Dallas last week. It was a really well made production.

I thought it was, you know, it was a full day and it was wire to wire at the George W. Bush Institute there at, on the SMU campus. Really good presidential.

Jeff McCarty: 00:15:29

It's a pretty cool spot.

Jim Glennon: 00:15:31

I did not get a chance to actually go to the museum part, but I guess that'll bring me back at some point. Yeah, really good crowd. I'd say, I don't know, 200 people.

Olivia DeLancey: 00:15:40

Seems like a reasonable estimate. Yeah, I mean it was full for the, for the venue. It was full, so great crowd.

Jim Glennon: 00:15:47

Yeah, really good crowd. Good mix of different roles. Got to meet a lot of people in the morning and then at lunch and then at the little happy hour after.

But the rest of it was just 15 to 20 minute to 25 minute sessions depending on, on who was speaking and a couple longer ones at the beginning.

Jeff McCarty: 00:16:04

People from all over the housing industry, right?

Jim Glennon: 00:16:06

Yes. Yeah. It wasn't just Mortgage people. It was, you know, insurance, realtors, brokers.

It was, you know, mostly it was residential, I say was the only line that was drawn. It was residential real estate.

But otherwise, yeah, really good mix of people talking about a lot of different things that, that all revolved around housing finance, the housing market and some of the, the other factors that affect what's near and dear to all of us.

Jeff McCarty: 00:16:31

So what were, what were some of the highlight takeaways from you beyond your session?

Jim Glennon: 00:16:37

I mean, so at the very beginning. So Logan Motashami is the lead analyst for Housing Wire and he kind of, he set off the day really nicely.

He just a, he's a great presenter and just has some really good takes on what's going on in the economy and what's going on especially as it relates to the, to the housing market and some of it's controversial, honestly, which I thought was really was pretty refreshing compared to some of the, you know, I think some of the more sterile takes that, that we all might have on, on the industry, especially with the market being a little bit, you know, quiet chaos right now.

I'd say, you know, some highlights were, you know, one was the, there was a theme across the whole day which was 6% is the rate that we all would like to see or something close to 6%.

And we're seeing that even right now, as we mentioned earlier on with the OBMMI getting closer to six and a half percent, drifting hopefully lower than that, we're seeing volume really pick up. So there was a consensus that if we get to 6%, that unlocks quite a bit of, of refis for obvious reasons. Right.

There's, there's a ton of seven plus interest rates out there right now because of what's going on the last couple years, but also should open up the part, the purchase market a little bit as well.

Whether it's builder business, you know, being able to buy down rates even deeper than, you know, four and a half, 5% that they're doing now, or just even just to open up for making purchases a little bit more affordable.

Jeff McCarty: 00:17:59

Yeah. You know, right now with house prices, you know, essentially becoming stable. Right. Starting to see a slowdown in home price appreciation.

So that's not going to hurt affordability probably for the foreseeable future. So. But you know, with insurance costs rising and then just high interest rates, those are the biggest drivers of home affordability right now.

So if we can help that with lower interest rates, kind of stating the obvious, there's.

Jim Glennon: 00:18:22

Right.

Olivia DeLancey: 00:18:23

Well, one of the sessions. So selma Hepp from CoreLogic, who's chief economist over there and also our next guest on the Market Advantage podcast.

She gave a really interesting presentation at the Housing Economic Summit on that exact topic. Jeff, the factors that are factored into affordability are changing.

And property taxes and homeowners insurance specifically were the focus of her presentation.

And as somebody who's a little less versed in these topics than you two would be, or most of the people in the audience may even be, you know, I found it very interesting that a lot of the homeowner's insurance risk was kind of concentrated in the center of the US So in what she called tornado alley, which piqued my interest, I grew up in Nebraska. She talked about wind and hail claims are some of the most common.

And I wonder if very many people realize that, you know, you always associate wildfires, hurricanes with some of this rising cost around homeowners insurance. So that was a really interesting takeaway for me.

Jim Glennon: 00:19:22

Agreed. Yeah, it's. Insurance is becoming such a bigger part of affordability like we've been talking about here. Right?

Yeah, I figured the same wildfires here in Colorado, on the west coast, and then obviously, you know, the hurricane areas of the country like Florida is what you think of, but you don't think about, I guess, tornado Alley as much, but that will be, you know, that becomes an issue when it becomes an issue during that season.

I also thought Logan's take on generally what's going on with the new administration and the economy was, was interesting and this story, it gets mildly controversial. He pointed to residential construction jobs as a, as a leading indicator of recession. As an indicator of recession. So I thought that was interesting.

That's something you can get easily off the Internet. You can go back in time and see how that has corresponded with the last few recessions that we've had.

And we are seeing a little bit of a plateau in residential construction hiring. So that's an indicator that I've been watching now since, since the event.

And also, you know, he talked a bit about the potential mass layoffs at the federal government level and then just generally how this new administration seems very focused on lowering rates somehow. Right.

Whether, you know, it doesn't seem like the strong arm approach is going to get rates lower, but there is this, this issue of affordability with homes and just generally rates being high and that kind of putting the brakes on a lot of economic activity. I think Logan's thought was maybe the government's fine with higher unemployment.

In fact, they might be motivated to push the Unemployment rate up over 4.3, 4.4%. Where it triggers the Fed to say, okay, we're lowering rates.

Whether that's, you know, a quarter at a time over this, this next year, year and a half, or whether, you know, that we get up closer to four and a half and there's some kind of emergency cut or larger cut. So maybe the government's okay with layoffs at the federal level, especially because the economy is still very strong, the private economy.

So, you know, those layoffs of government employees maybe doesn't.

In their mind, there's almost no downside to it, which, again, that's a bit myopic way to look at things, but just an interesting take on what might be going on with the new administration.

Jeff McCarty: 00:21:37

Yeah. Depending on which side you're on, that's either a nefarious take or a pragmatic take.

Jim Glennon: 00:21:42

Could be totally practical, right?

Jeff McCarty: 00:21:45

Yeah. That's an interesting way of looking at it. Definitely didn't think it like that.

But as you know, as we always talk about on this podcast, the two numbers the Fed watches being unemployment and inflation. And so unemployment is kind of one of those levers.

Olivia DeLancey: 00:22:00

1. One theme that kept coming up was plan for the. No, not. You have the known unknowns and the unknown unknowns. Jim, Any. Any takes there.

Jim Glennon: 00:22:10

I kept having trouble keeping that phrase straight.

Olivia DeLancey: 00:22:13

So I, as I just stumbled over it, clearly. I do too. Huh.

Jim Glennon: 00:22:17

I think everyone on stage did, too. But yeah, I totally get that.

There were a bunch of good sessions and that came up in, I think the session right after Logan's, which was Ryan and Brian. I'm sorry, it was Mike, another data guy from the. From the housing wire. And it's kind of. Yeah. Keep an eye on what we know. We don't know.

And then the things we're not expecting, I think is. Is. Is the point there. Right. And you know, back to just economic policy of the new administration. I don't know if I'm.

It's because I look at it through the lens of a mortgage person. But now I'm really starting to pay even more attention of any kind of policy decision that comes out. How could it affect interest rates?

And is the intent of that policy to indirectly lower interest rates that there's a huge unknown there. But I'm more focused on that after that first session. Just thinking through how lower rates and lower fuel costs. Right.

That was the other thing that Logan mentioned and other economists have mentioned. If you can get those two things lower, you may be able to keep inflation under wraps. Right.

Keep them, keep prices from going up, but also encourage economic activity and make housing more affordable without having to make any major policy decisions that directly affect like the housing industry or the GSEs or whatever. Right.

Jeff McCarty: 00:23:36

That was an enlightening way to think about it, but it fits in with everything you've heard. Right? You know, Bessant continues to say those two things are his focus.

And so, you know, starting to read the tea leaves about how they're going to get there is pretty interesting.

Jim Glennon: 00:23:50

Yeah, it's like perfect.

If the economy can stay strong but unemployment goes up, like for interest rates, that's kind of, that is perfect if the economy is not hurt by these, these layoffs.

Jeff McCarty: 00:24:00

Olivia, what were some of the highlights for you of the conference overall?

Olivia DeLancey: 00:24:05

So this was my first time attending one of Housing Wire's summit events. So these are kind of their one day deep dive events onto a particular topic.

So for example, our chief Technology officer Seaver Suleyman spoke at the AI Summit last year, but this one was all about economics, housing economics. As Jim mentioned, overall takeaway, people showed up to learn. Everybody had their notebooks, whether digital or handwritten.

They were very engaged with the sessions. Sometimes you see people having hallway meetings and not attending sessions at events. That was not the case here.

Everybody was fully engaged in their seats, ready to learn. And I think one of the things that lends itself well to that is the format that Housing Wire uses at these things.

The more quick fireside chat, 20 to 30 minute sessions, it was all really good. But one session that stood out to me was a little bit different than the others. And it was focused on refining your tech stack for success.

And I think that kind of backs into that. There's the known unknowns and the unknown unknowns. This is maybe a known unknown. We know eventually the market is going to change.

So what should you be doing in your house to get your tech in order in the meantime? And of course, Optimal Blue is a tech provider. So this piqued my interest.

One of the panelists was Christy Sukamnet and she is Chief Lending Officer at University Federal Credit Union. Fun fact. Christy actually did a session in partnership with our own John Demonso. He's one of our PPE Solutions specialists.

This was back at the Acuma, the credit union annual event in Vegas last year. So I recognized Christie, but she is a great panelist. One thing she said was talk to your vendors.

Your vendors are there to be your partners and lean on them to make sure you are using your tech to its fullest. Because we are In a period of massive innovation, companies are just rapidly releasing new features, new products.

As a testament, Optimal Blue, we just announced seven new product features just a few weeks ago. So as these vendors are innovating at such a rapid pace, how are you as a user making sure you're getting the absolute most out of these products?

And that was really.

Her counsel was, sit down with your vendor, talk about what you're using, talk about how you could maybe be using it differently based on your own business goals.

And, you know, at Optimal Blue, I don't think I could have been shaking my head, nodding more enthusiastically as she was talking about this, because that's something very near and dear to us.

We have kind of a business relationship manager and a client success manager dyad structure where we are sitting down with clients, proactively showing them what they're using and recommending things, ways that they can use it more effectively to help their operations. So I really liked that session.

I'll leave all of the commentary on market matters and economic matters to you, Jim, but that was something that stood out to me.

Jim Glennon: 00:27:02

Agreed.

Jeff McCarty: 00:27:03

Yeah, that's great to hear.

I mean, obviously I am very passionate about that topic and it is a huge focus for us, especially this year as a tech vendor, making sure our clients are utilizing all the great. As you said, you know, we are developing a rapid pace.

So, you know, I already feel like things that we released in the fall, you know, people have already kind of forgotten about, they haven't adopted it yet. Then, you know, we want to make sure, you know, they still remember the things we released six months ago and they do get a chance to adopt it.

So, you know, that's, again, that's, that's good general advice.

Everybody has numerous tech vendors and you got to make sure, you know, you're taking advantage of all that as, as you said, so that, you know, when volumes increase by 50%, you're not trying to implement new solutions, while also you've got these solutions in place that help you, you know, process those increased volumes. So.

Olivia DeLancey: 00:27:51

Right. And lean on the experts. Lean on the experts who work at these, these shops. I mean, you, you too, case in point. You've worked in the business.

You're, you're so familiar with some of the challenges that they're facing. Like what, what a perk of working with a vendor who has so much in house expertise that they can help you really maximize the use of your tech.

Jim Glennon: 00:28:12

So, yeah, and Christy brought receipts like they had.

I believe she said their cost to produce a loan is down to about 9, $800 I think is the number that I heard in an industry where the average is about 12,5. So they're obviously utilizing technology correctly and to make themselves more efficient.

So not only can they scale without adding a ton more people, but it sounds like they've also lowered their cost just in general. And as a credit union, that's not always the case.

Ben Larcombe: 00:28:41

Right.

Jim Glennon: 00:28:41

They're not always that focused on, on cost.

Jeff McCarty: 00:28:45

Right.

So now they can offer the service and the, the competitive rates, which again, offering a more competitive rate affordability, top of mind for everybody. So you can lower cost.

Jim Glennon: 00:28:54

Right. So I moderated a session with Victoria Delus, who is s svp of finance@rate.com and also Morgan Wise, who is the CFO over at Atlantic Bay.

Really good session. Really good wisdom dropped on the whole group there. We were, you know, we were there as capital markets mortgage experts in a room.

Again, as I mentioned, it was a lot of different roles. So we brought just things specific to, to the mortgage industry.

We covered some of the, the facts that were brought up earlier and some of the theories about what, you know, the 6% rate and what gets us there and mortgage spreads. We talked a little bit, educated the group a little bit on what affects mortgage spreads. Right.

So the spread between mortgage rates and, and Treasuries.

And then we got into, really getting a little bit deeper into profitability and how can lenders get more profitable in a market that's been pretty tight, albeit a little chaotic over the last couple years. And we talked about some of the simpler things.

Again, knowing that in the room there's probably business owners, head of finance, some folks that may not even dabble in capital markets, you know, educating on things like being sure that you're delivering mandatory, for instance, that you're hedging. Right. Rather than best efforts because there's a, there's a quarter point to three, eight of a point of pickup there.

That can mean the difference between being profitable and not in a tight market like this. We talked about very proactively managing your margins.

I think there's still way too many lenders out there who leave their profit margins on autopilot and they're probably not as competitive as they could be in some MSAs or some product groups and maybe a little overly competitive in others, leaving some money on the table.

So we talked through how you can use data, such as the data that we have in, in optimal blue to drive those, those margin decisions and to be more deliberate about how you set your, your street price that Kind of.

Jeff McCarty: 00:30:48

Goes back to the.

Honestly, the previous conversation as I think about some of our tools, of course, but you know, so many, so much of this technology allows you to automate so much, but it doesn't mean setting it and forgetting it. Right. It's opening up your time to be more strategic, to focus on more of these strategic items.

Jim Glennon: 00:31:06

And strategy could also include liquidity.

That was, that was the other thing we brought up where Victoria had some really good points on, you know, as you mature through, you go from best efforts to mandatory and then you move towards delivering directly to the GSEs. Don't just stop there and don't leave your aggregators in the dust.

When you move to co issue or wherever your strategy takes you, you really have to have all those options open to you as a, as a lender.

Jeff McCarty: 00:31:32

Nice. Yeah. Those are themes we're all very passionate about and you know, I think it makes sense. It fits in really nicely with what we're looking ahead to.

Some of the. I'll give it a shot here. Some of the known unknowns and the unknown unknowns.

Jim Glennon: 00:31:47

You got it.

Jeff McCarty: 00:31:47

Yeah.

Jim Glennon: 00:31:50

Agreed. Yeah. Keep all your options open and make sure that you've.

That you're focused on who your counterparties are and you're constantly re looking at that and you're also looking at your own strategy and your bottom line. Morgan brought up some great points.

Just about, you know, knowing what your profitability is down to a loan officer level, down to a product level, down to the branch. Right.

So you're sure you're kind of feeding the profitable parts of your business as opposed to maybe dragging some, some weight that needs to be improved upon.

Jeff McCarty: 00:32:17

Good. All right, good. Sounds like a great conference.

Jim Glennon: 00:32:21

Yeah. As far as like one day conferences, that was very efficient, super educational.

A lot of themes kept coming up, so there's obviously a lot of good consensus in the room. I don't know anything else you would add, Olivia?

Olivia DeLancey: 00:32:34

No, I'm just going to keep practicing saying known unknowns and unknown unknowns.

Jeff McCarty: 00:32:39

We're getting good.

Jim Glennon: 00:32:40

It's going to be the deal for the, for the next few years here, I'm afraid.

Ben Larcombe: 00:32:44

Yes.

Jim Glennon: 00:32:45

All right, thank you very much, Olivia.

Jeff McCarty: 00:32:47

Thanks, Olivia.

Jim Glennon: 00:32:49

All right, let's close this thing out. Thank you so much, Ben, Jeff and of course Olivia. For another great podcast, tune in next week we will have Rob Crane from Down Payment Resource.

We'll talk. Kevin and I will talk with Rob about what Down Payment Resource does.

And just getting into the whole huge world of down payment assistance programs that, that Down Payment assistance resource can help organize and kind of curate for you. So I'm looking forward to that next week. And that's it for today.

Join us next week for another episode of Optimal Insights, where we'll continue to provide you with the latest market analysis and insights to help you stay ahead. Don't forget to follow us on LinkedIn for more updates and to access our latest video episodes.

You can also find each episode on all major podcast platforms. Thank you for tuning in to Optimal Insights.

Jeff McCarty: 00:33:46

SA.