The Peter Zeihan Podcast Series The Fire Hose of Chaos: Housing Problems
May 8, 2025
The discussion kicks off with the significant impact of labor costs on housing, particularly highlighting the reliance on immigrant workers in construction. It explores how policy changes might shake the housing market's stability. The conversation then shifts to the soaring costs of essential materials like wood and steel, driven by tariffs, and how this affects homeownership and mortgage rates. Challenges tied to affordability and availability of housing create a tumultuous landscape, comparable to the tale of the Three Little Pigs versus the Big Bad Wolf.
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Labor Costs and Housing Impact
- Labor costs form 20-40% of housing cost, with a significant portion being immigrant labor.
- Deporting millions of illegal laborers would sharply increase housing costs due to labor shortages.
Tariffs Raise Building Material Costs
- Material inputs like wood, canvas, steel, aluminum, copper, tile, and stone also face high tariffs raising costs.
- Tariffs on Chinese-made electrical components halted shipments, worsening supply issues.
Rising Mortgage Costs
- Mortgage financing costs are rising amid shrinking capital availability due to government policies and retirement of baby boomers.
- Mortgages are near 20-year highs and expected to increase further, worsening affordability.