Asset Inflation Locks Younger Generations Out of Homeownership

Resources

Books

• "Thank You for Smoking" - Mentioned for a memorable line about mortgages, highlighting their significance in financial transactions.

Videos & Documentaries

• "The Zappos Story" (as told by Tony Hsieh) - Used as an example of how customer support can be transformed from a cost center into an engagement opportunity.

Articles & Papers

• "Piece that we wrote a little while ago showing that the price of housing in the bay area has declined massively in the past 25 years" (a16z) - Used to illustrate the concept of asset price inflation when housing is priced in terms of stocks.

People Mentioned

• Henry Ford - Referenced for his revolutionary impact on the automobile industry, drawing a parallel to potential innovations in housing construction.
• James Levitt - Mentioned as the developer of Levittown, a pioneering track housing community.
• William Levitt - Mentioned as the founder of Levitt and Sons, who applied factory-like assembly to home building.
• Larry Page - Quoted for his "toothbrush test" concept at Google, emphasizing the importance of daily use for product success.
• Tony Hsieh - Referenced for his philosophy on customer support at Zappos, turning it into a "love center."
• Warren Buffett - Quoted for his saying, "Nobody pays to wash a rental car," to illustrate the concept of rent-to-own and property care.
• Cheryl Sandberg - Mentioned as an example of a public figure whose home sale might draw curiosity, highlighting the entertainment value of looking at real estate.
• Sharon Stone - Mentioned as an example of a public figure whose home sale might draw curiosity, highlighting the entertainment value of looking at real estate.
• Liam Neeson - Mentioned as an example of a public figure whose home sale might draw curiosity, highlighting the entertainment value of looking at real estate.

Organizations & Institutions

• Bureau of Labor Statistics - Mentioned as the source for the Consumer Price Index (CPI).
• Fannie Mae and Freddie Mac - Referred to as government-sponsored entities that purchase mortgage notes in the secondary market.
• Stanford University - Mentioned in the context of a retired professor who was a neighbor.
• Harvard University - Mentioned in the context of attending college and getting a credit card from the Harvard Coop.
• First USA Bank - Mentioned as a bank that eventually became part of Chase, illustrating the evolution of financial institutions.
• Chase Bank - Mentioned as an example of an evolving financial institution.
• PayPal - Mentioned as a previous company where Varun Krishna worked, in the context of his fintech experience.
• Groupon - Mentioned as a previous company where Varun Krishna worked, in the context of his fintech experience.
• Intuit - Mentioned as a previous company where Varun Krishna worked, in the context of his fintech experience.
• Google - Mentioned in the context of its daily active user products and monetization challenges, as well as Larry Page's toothbrush test.
• JPMorgan Chase - Mentioned as an example of a valuable bank with a balanced business model across various financial services.
• Lennar - Mentioned as a company that uses a version of the assembly line approach for building homes.
• Hertz - Mentioned in Warren Buffett's quote about rental cars.

Courses & Educational Resources

• a16z's Substack - Mentioned as a resource for more episodes.

Websites & Online Resources

• Redfin - Mentioned as a real estate brokerage site with a large number of monthly active users and a mobile app, now acquired by Rocket.
• Zillow - Mentioned as a real estate website with many users but challenges in monetization, and as an example of a "Zillow and chill" phenomenon.
• Mr Cooper - Mentioned as a company acquired by Rocket, with a significant servicing book, to be integrated into the Rocket platform.
• Point - Mentioned as an investor in a company that allows homeowners to sell part of their house.
• Rocket Mortgage - The company discussed throughout the episode, its history, strategy, and acquisitions are central to the conversation.
• ChatGPT - Mentioned as an example of an AI tool that people use daily but which is not yet profitable.
• Unprompt - Mentioned as an AI company.
• Gentech AI - Mentioned as an AI company.

Other Resources

• Levittown - Discussed as a historical example of early track housing developments built for returning GIs after World War II.
• Empire State Building - Used as an analogy for the decline in construction speed and efficiency over time.
• SP 500 - Used as a benchmark for investment returns, contrasting with salary bumps.
• FHA loans - Mentioned as a type of mortgage product.
• VA loans - Mentioned as a type of mortgage product.
• 30-year fixed mortgages - Discussed as a common mortgage product in the US.
• Adjustable-rate mortgages (ARMs) - Mentioned as a type of mortgage product.
• Modular housing - Discussed as a potential solution for reducing construction costs.
• 3D printing - Mentioned as an advancement in material science that could help lower home building costs.
• Robotics - Mentioned as an advancement that could help lower home building costs.
• Blockchain technology - Discussed in the context of fractionalization experiments, with skepticism about its application to physical assets.
• Crypto - Mentioned as something the speaker is a fan of, but distinguished from its application to physical assets.
• Credit cards - Discussed in the context of customer acquisition cost (CAC) and lifetime value (LTV), and as a common financial product.
• HELOC (Home Equity Line of Credit) - Mentioned as a financial product that can be valuable for banks.
• Mortgage servicing rights - Explained as the ongoing relationship with a mortgage borrower after the loan is closed.
• Originator, underwriter, closing table - Terms used to describe parts of the mortgage process.
• Secondary market - Explained as where mortgage notes are sold after closing.
• FICO score - Mentioned in the context of having a low score despite owning a home.
• Net interest margin - Explained as how banks make money.
• Loan to Value (LTV) - Defined in the context of mortgages and contrasted with Lifetime Value (LTV) in startup discussions.
• Customer Acquisition Cost (CAC) - Explained in the context of acquiring customers, using the example of a free t-shirt.
• Fourier Transform - Used as a mathematical concept to explain how cyclical business revenues and profits can combine to create a more stable, monotonically increasing line.
• Sine curves - Used in the explanation of the Fourier Transform to represent cyclical business performance.
• Investment banking - Mentioned as a business line that can be cyclical but contributes to a bank's overall stability.
• Wealth management - Mentioned as a steady revenue stream for banks.
• Retail banking - Mentioned as a product line for banks.
• Home equity loans - Discussed as a way to access trapped equity in homes.
• AI-driven mortgage experience - The future vision for Rocket's mortgage process.
• Asset price inflation - A key concept discussed, contrasting with CPI inflation.
• NIMBYism (Not In My Backyard) - Discussed as a significant barrier to new home construction.
• Fractionalization experiments - Discussed in the context of startups trying to enable partial home ownership.
• Blockchain-based ownership representation - Discussed and critiqued for its applicability to physical assets.
• Activation energy - Used to describe the high initial effort and complexity required to enter and succeed in the housing industry.
• Neo banks - Mentioned in comparison to established credit card networks.
• Visas, Mastercards, Amexes - Examples of dominant credit card networks.