Zim,
Good observation! I think they are mixing apples with oranges a bit: % of US households which ALREADY own a home vs. % of US households which CAN'T QUALIFY to buy a home at current prices.
Those are different statistics; but probably not contradictory. (They just look that way, because that article wasn't particularly well written, imo, and the times are weird)
But there is a BIG problem. It is being documented by many sources. http://www.nahb.org/blog/2025/06/harvard-report-shows-the-housing-affordability-crisis-worsening.
The report highlights the record-high number of cost-burdened renters (those spending more than 30% of their income on housing and utilities), the staggering increase in cost-burdened home owners, and the pricing out of first-time home buyers.
While rents are increasing nationwide, rental demand still remains strong. With fewer households able to afford to buy a home, the renting population grew by 848,000 in 2024, absorbing the new 608,000 multifamily units completed last year — the most developed in nearly four decades. Further exacerbating the issue, the number of higher-rent units has increased while the number of lower-rent units has decreased.
Since most houses are bought with loans, there has historically been a VERY strong, VERY predictable inverse correlation between interest rates and housing prices. This shows up as a housing "boom" pretty much every time interest rates drop signficantly. And, conversely, a housing price "collapse" when interest rates rise significantly. The government (or whomever) is effectively transferring wealth one direction or the other.)
But this time, at least so far, the boom happened...and the collapse has yet to show up to the degree it ordinarily would. Why not?
Some of it is continued inflation in general: both technically (increase in money and debt) and nominally ("prices going up broadly"). Interest rates are "high" or "low" versus what? Versus inflation! With money being created out of nothing like it is going out of style (it is) interest rates at 7% are actually way too low for lenders...and yet too high for most borrowers!!!
And now we have the dollar losing 10% of its value versus other currencies in last 6 months.
So what do you do if you want to preserve what you have in buying power?
Associated with this is something I've never seen before: The current "can't afford to sell" phenomenon: People who sell a home they bought or refinanced when interest rates were 2-3% (and I know a few) would NOT qualify for a new loan (and probably not for a refi) if they were to move.
When interest rates were cheap, in the middle of the Covid socialism experiment, people who bought a home, or refinanced were, in real terms, being PAID UP FRONT to buy or refinance. While mortgage interest was at 2-3$ the actual inflation rate was 20%+ (inflation is when money and credit is being made out of "thin air" and pushed into the the market to compete with free market prices.
And now you'd have to be really dumb, or really desperate, to sell, since you'd have to give up that subsidy and couldn't afford a replacement property which made any comparative sense! So 2-3% interest financed properties are not generally for sale at the prices a clearing situation would motivate.
So, as long as you had a steady job it was a no brainer: if you bought a house early on, when some people were distressed into sales (job losses) while other people fully employed, or even PPP loaned (solid government and high-end desk jobs) you were, effectively, being PAID a LARGE sum of money to buy or refinance.
Anyway, it is an interesting issue. I have been heavily involved in real estate for 50 years or so. I've seen everything, and sometimes more than once. But not this before.
It is potentially a sea change...potentially like the sea going out "curiously" before the tidal wave comes in. And yet, with the dollar rapidly losing "Reserve Currency" status even as fiat all around the world is getting found out, all at the same time, as the theft mechanism it is (as Trump knows better than approximately anyone) it is hard to say that the "smart" thing to do is to sell!
P.S. And the ~30 MILLION illegal migrants who were PAID to invade the US has created a massive demand-supply mismatch for housing. Which allowed rent prices to explode, even in a technically bad economy. And it remains anyone's guess how long, if ever, it will take to export them (odds remain on NEVER for the vast majority of them). These folks, obviously, take out the lower cost housing supply, and squeeze those who might otherwise be ready to buy an affordable home.... (And let's not forget that AirB&B had already caused a massive shortage in lower priced homes, which has yet to fully unwind).
PPS. I apologize for the meandering. I was going to just make a fast response, but there is a lot going on and the situation is *quite* hair-trigger weird wired.
This would normally be a strong "sell". But some people can't afford to sell. And some people can't afford to buy. And right now it is often the same person on either side of that divide! For myself, I am holding!
| 
