Thoughtful Money with Adam Taggart Historic Unaffordability Squeeze To Weigh Down Home Prices In 2025 | Lance Lambert
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Dec 29, 2024 In this insightful discussion, real estate analyst Lance Lambert, former editor at Fortune and co-founder of ResiClub, addresses the shifting dynamics of the housing market as prices stagnate. He delves into the implications of soaring mortgage rates and the unique pressures facing homeowners. Notably, Lance examines the effects of labor market fluctuations on affordability and how demographic trends are reshaping demand. He also illuminates the challenges posed by dwindling undocumented labor in construction and its broader economic impact.
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Historic Unaffordability
- Housing affordability is at its worst since the 1970s, rivaling the early 1980s.
- Unlike the 80s, high home prices relative to income offer no relief, even with cash purchases.
Slump in Existing Home Sales
- Existing home sales slumped since 2022, marking the worst years since 1995.
- High mortgage rates and a "lock-in effect" are contributing factors.
Rising Inventory
- Housing inventory is rising across the U.S., driven by slower sales rather than increased listings.
- This suggests a shift towards a more balanced, or even buyer's, market.