In a session titled, “Asset Manager Block: Inside the Investor Mindset,” PEMCO Capital CEO Louis Amaya explored how investors are thinking in the current market, why hard assets remain a priority, and what trends such as housing shortages mean for future opportunities.
Amaya shared practical insights on understanding capital structures, confidently speaking the language of institutional capital and discussing how agents can even begin positioning themselves to invest. He is a senior executive with 35+ years of experience in U.S. residential mortgage trading, debt capital markets, and real estate asset management.
Here are five takeaways from Amaya’s talk.
Investors Continue to Favor Housing as a Long-Term Hard Asset
Despite economic uncertainty, Amaya believes housing remains one of the most attractive asset classes because of persistent demand, structural supply shortages, and its role as a necessity for consumers.
Why is housing the perfect hedge against distressed assets?
“Housing remains a consistently in-demand asset class in broader economic conditions,” Amaya said. “Home prices have historically appreciated during both economic expansion and disruption as we saw with COVID. Housing is a fundamental necessity that provides security for families.”
He added that when people are scared, as we saw during COVID, they want a home, they want to hunker down, they want to bring their family together, and they want to feel safe. That’s a big driver of housing prices, he said.
Government Intervention Often Creates the Next Investment Opportunity
Amaya argued that major government responses to economic crises frequently create unintended consequences that savvy investors can capitalize on.
“The government has talked a lot about affordability, so we know that’s on the table. Historical precedent suggests government is going to get involved. They’re going to do something,” Amaya said. “And whenever they do something…they create short-term policies to address the short-term pain, but it causes long-term unintended consequences that create opportunity.”
“We saw gold and silver go through the roof,” he continued. “We saw home prices during COVID go through the roof. … Government intervention patterns suggest continued market distortions. Every time the government gets involved, they mess something up. And so, it’s our job as an investor to find where that dislocation is.”
Rising Debt and Inflation Are Reshaping Investment Strategy
Amaya believes record government debt levels and persistent inflation risks are permanently changing how investors think about risk, capital preservation, and portfolio construction.
He noted that the U.S. economy is facing rising vulnerability because of high debt, limited monetary policy, and dollar depreciation.
“When we have high debt, today’s debt to income ratio is 120%. Highest in the history of the United States. That’s a huge problem and the government is going to address it. We just don’t know how,” he said. “The market is fundamentally changed forever.”
Housing Policy Could Become a Major Market Driver
Housing affordability remains a political priority, and Amaya expects future federal action to create both opportunities and market disruptions.
“The U.S. continues to have a structural housing shortage. As we go to the next crash, there are still not enough houses. So, there are going to be plenty of buyers for these homes that are going to come to the market,” he said. “Housing affordability and expanding access to homeownership are expected to remain major political economic priorities.”
Amaya said the President Trump’s comments and actions on housing and housing-related policy have been very interesting.
“Like him or not like him, he tells you what he’s going to do upfront, which is to me the biggest favor for small investors he’s ever done. He tells you over and over what he’s going to do, and then he does it. So, it gives the small investors a chance to listen and understand, as long as you ignore all the noise, because typically there’s no forward guidance on that type of stuff.”
Real Estate Professionals Must Think Like Investors
Amaya encouraged agents and industry professionals to deepen their understanding of economics, monetary policy, and capital markets to better serve clients and identify opportunities.
He said to “consider inflation-protected securities, given reoccurring inflation cycles, monitor duration risk, and fixed income portfolios during rate volatility.”
“Where I want to be today is in hard assets. So, if I’m investing in investments that count on future cash flow,” Amaya said. He added that future cash flow can always dry up.
“I’m focused on hard assets, where the value of the underlying asset is the collateral, and it’s not based on future cashflow. I’m going to buy and sell that. And there are certain hard assets that we know are going to perform really well,” he said.
He advised investors to pursue mutually beneficial alliances.
“Everything’s going to consolidate. You have to have really good partners, and those alliances and those partnerships are very important,” he said.
He also suggested diversifying, obtaining a mortgage loan officer license, owning your own assets, and becoming an investor.
“If you want to make relationships with investors, bring them deals,” he suggested. “I’d structure your own fund. If you have investors, put your own fund together. You’ll learn so much by structuring your own fund.”
He said that Trump has already put restrictions on single-family rentals, as well as floating the idea of reprivatizing Fannie Mae and Freddie Mac. He’s also already directed Fannie and Freddie to purchase $250 billion in MBS. This is designed to help create demand and liquidity.
Amaya said that financial repression “is the most fascinating thing that I’ve read in a long time,” and a “government trick [that] works.”
Amaya added that the Fed’s focus on keeping fund rates 2% to 3% lower than inflation “[pays] down artificially increased GDP and debases the debt that the government owes because they keep refinancing at the artificially low rates and they generate GDP at the inflated rate.”
In other words, he explained, the GDP is created from the money that’s being spent on the economy.
“We saw two years of it during COVID. In 2021 we had 2.5% interest rates and inflation at 5%. The market went nuts and we dropped 5% in the debt to GDP ratio, but you can see how this type of program would cause a boom in the industry,” he said. “I honestly don’t see another way out of this without them doing something like this.”
He added that today’s environment is unusual because the government carries massive debt that is the highest in history.
“There will be laws implemented alongside monetary policy to address the current conditions,” he said. “I don’t know what that’s going to look like. There are some really smart people that figure this stuff out. I’m surprised all the time by new financial products and programs that can help keep things going, but that’s going to happen.”
However, he theorized that these laws and policies may birth unintended consequences that will create the next opportunity, just like “we saw for the last 20 years.”
He said the key is “understanding what’s being implemented and stress-testing these programs to see what potential opportunities that these are going to create in the future.”
So, he asked, how should agents prepare?
“You need to advise that your clients are getting smarter and smarter all the time, and they’re asking questions, they’re reading the internet, they’re reading what’s going on,” he said. “You need to be an adviser and explain the current economic environment and where they can potentially fit in. If someone asked me today, ‘If rates are going to drop, should I wait?” my answer is, ‘Don’t wait. Buy something now because once rates drop, housing is going back up.’ You can just refi.”
