Jonathan Corpina, Senior Managing Partner, Meridian Equity Partners, NYSE Equity Trader, and Market Commentator joined Benzinga's Premarket Prep show to discuss how an interest rate cut could affect the real estate sector.
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00:00With interest rates going where they're going,
00:02and we've got the somewhat of the soft playbook
00:07of where that's gonna go.
00:08I think some sectors that have been benefiting
00:12and will benefit from that,
00:13and I know it's had a pretty good move to it,
00:15is the real estate sector, right?
00:16You start to see what's going on there.
00:19I think people got very, in a good way,
00:22comfortable with interest rates being where they are
00:24and where they were for such a period of time.
00:26And you're looking at a 30 year fixed
00:27for, I don't know, seven, seven and a quarter percent.
00:30Once those start to take down,
00:31and we've already start to see that take down,
00:34I think home purchasers,
00:36whether they're first time or second time or third time,
00:39they're not gonna wait and pick that bottom of that market.
00:42They don't have time for that, right?
00:43They're gonna start to see as soon as these ticks come in,
00:46the systems are gonna automatically calculate
00:48how much savings that's gonna be
00:49from the higher interest rates.
00:52And we're gonna start to see that activity
00:54definitely start to pick up.
00:56I don't think that pendulum in interest rates
00:58is gonna move as fast as we've seen,
01:00whereas we're gonna want them to come back.
01:02But once we start trickling down in that lower six handle,
01:05maybe higher fives that we're gonna start to see,
01:08hopefully in a basis where the Fed can get it there.
01:12And I don't think it's gonna be anytime in 24,
01:15it'll be in the beginning of 25.
01:17We'll start to see real estate tick up.
01:18So you're starting to see some of that activity
01:21preemptively occurring in that sector
01:23in some of the home builders.
01:24I mean, we've talked about financials.
01:27Financials have weathered this storm back and forth.
01:29Yes, volatility associated in that sector.
01:31But I think with interest rate
01:33and new interest rate environments,
01:34we're gonna start to see, again,
01:35it kind of all links in together.
01:36More activity on the mortgage side, on the banking side.
01:40Money's gonna be cheaper.
01:41People are gonna start using it and wanting it.
01:43And I think the banks have been sitting
01:46on a lot of money for a while
01:47with interest rates where they were,
01:48maybe not lending out as much as they've had in the past.
01:50So I think we're gonna start to see some free flowing there,
01:53which is gonna translate in the financial sector.