Plain English with Derek Thompson cover image

Plain English with Derek Thompson

Why It’s So Hard to Buy a House Right Now—and Why It Might Get Better Soon

Dec 8, 2023
Mark Zandi, chief economist at Moody’s Analytics and host of the Inside Economics podcast, discusses the current U.S. housing market crisis. He explains why high home prices and mortgage rates are making ownership dreams seem unattainable for many young people. The conversation delves into the impact of remote work on housing preferences and how job stability and wage growth might soon improve affordability. Zandi also highlights potential signs of recovery in the market, with falling mortgage rates and an uptick in building material orders.
46:26

Episode guests

Mark Zandi

Podcast summary created with Snipd AI

Quick takeaways

  • The US housing market is currently facing significant affordability challenges, especially in high-income areas, making it increasingly difficult for young people to own homes.
  • Considering the high cost of housing, experts suggest that millennials should prioritize renting over buying due to the flexibility and financial advantages it offers, such as avoiding burdensome costs and the opportunity to invest elsewhere.

Deep dives

Housing market challenges due to affordability and supply shortage

The US housing market is facing a unique and challenging period due to skyrocketing home prices and limited availability of affordable homes. The housing market has become increasingly unaffordable, especially in high-income areas like Los Angeles, San Francisco, DC, and New York. Young people, in particular, feel that the housing market is closed off to them for the foreseeable future. Home prices have increased significantly, with a 40% appreciation since the start of the pandemic. The affordability issues in the housing market are impacting where people can live, what jobs they choose, and their ability to start families.

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