September 26, 2025 • 29 mins
The U.S. housing market feels impossible to navigate — high prices, rising taxes, low inventory, and mortgage rates that just won’t budge. This week on Brown Ambition, Mandi sits down with Daryl Fairweather, Chief Economist at Redfin, to cut through the noise and explain what’s really going on.
From the “lock-in effect” keeping homeowners stuck, to why renting may actually be more affordable than buying in many cities, Daryl offers insights grounded in both data and behavioral economics. She also shares practical advice for first-time buyers, discusses the hidden costs of homeownership, and explores how systemic challenges continue to impact Black and Brown communities.
And before she goes, Daryl gives us a sneak peek into her new book Hate the Game: Economic Cheat Codes for Life, Love and Work — an empowering take on how to use economics to outsmart unfair systems and claim your wins.
What You’ll Hear in This Episode:
-
Why so many homeowners feel “stuck” with low-rate mortgages
-
The growing affordability gap between buying and renting
-
How return-to-office mandates are reshaping housing choices
-
The hidden costs of owning a home (taxes, insurance, maintenance)
-
Programs that can help first-time and minority buyers
-
How zoning and local government decisions impact affordability
-
Why Black households are seeing declining homeownership rates
-
Insights from Daryl’s new book Hate the Game
BA Fam, Let’s Connect!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Hey, ba fam, Welcome back to Brown Ambition. This is
a very special episode like to call the Baqa where
we take your questions and try to offer some answers.
And usually I will qualify that by saying answers with
like a lowercase A.
Speaker 2 (00:18):
Please don't assume me. You'll know I'm not your financial planner,
not your investment adviser. You're definitely not your real estate
agent or your attorney.
Speaker 1 (00:25):
So you know, just here posting the show for ten
years talking to some badass brown women about their finances
in their career. But I am joined today by someone
who is a bit of an expert in her field,
probably at the top of her field. And it's not
every day you just talk to a bad ass brown
woman who is in economics and working at one of
the largest real estate I don't know technology firms in
(00:48):
the country, but I am.
Speaker 2 (00:49):
Very honored to be joined today by Darryl Fairweather. She
is a chief economist at Redfinn and she's here to
talk to us and hopefully help us, like bring a
little bit of sanity and under standing to what is
actually happening in the US housing market right now.
Speaker 1 (01:05):
So Darryl, thank you so much. For joining me on
broad ambition.
Speaker 3 (01:08):
Thank you so much for having me. I'm delighted to
be here.
Speaker 2 (01:10):
So tell us a little bit about what you do
at Redfin? What does one as a chief economist, and
especially in your particular cime, you said you focus a
lot on behavioral economics. So what are you up to
over there at Redfin?
Speaker 3 (01:19):
Yes, I study the housing market. We have so much
great data that I have access to at Redfin, data
about the housing market, and I connect that to the
broader economy and also to the decisions that our customers
make when they're buying or selling homes. I have a
team or we have a team of economists that analyzes data,
we put out research reports, and then I go and
communicate that research out to the broader public so that
(01:42):
people feel more confident when they're making a decision about
whethery're to buy or sell or rent, that they have
all the information that they need about how to make that.
Speaker 2 (01:51):
Decision for themselves. O p' a perfect person to talk to.
So what's actually happening on? What's going on? I'm stressed.
I told you a little bit about my and I
think a lot of the A listeners like I was saying,
a lot of us own homes, and we were first
time home buyers, got a little lucky. Our audience is
that elder millennial audience, you know, where some of the
(02:11):
ones who if you were lucky you got a house
before everything kind of went nuts post pandemic, when rates
were going up and housing affordability became such an issue.
Speaker 1 (02:21):
And I think I'm definitely in that camp of a
homeowner who is who's like, yeah, it's.
Speaker 2 (02:28):
Great to have. It's a good problem to have. But
I'm feeling really stuck. I live in such an expensive
market in New York, and you know, I have my
little house.
Speaker 1 (02:37):
And a cute little rate, but we're looking to got
I got two kids, want I want a bigger house,
some more space, and it just doesn't seem feasible. Like
I think, housing prices in my neighborhood are up fifty
percent from when I bought my house six years ago,
which is like, yay for me, I'm such a genius.
They're very lucky. But at the same time, if I
(02:59):
sell it for that, I have to go buy a
bigger house, which is going to be even more you
know what I mean. So can you help me feel
less insane. Is that just like, is that what you're
seeing in your data?
Speaker 3 (03:09):
That's exactly what we're seeing in the data. There are
record low amount of sales happening right now. There was
this boom in sales that happened during the pandemic because
of how low mortgage rates were. Everybody who could buy
a home did buy a home, and everyone who already
had a home they refinanced their mortgage and got a
record low rate. Now, after that, we saw mortgage rates increase.
(03:31):
And normally, when mortgage rates increase, that means that there
are fewer home buyers out there, and that means that
sellers have to lower their prices to meet home buyers
where they're at. But that did not happen because homeowners
would rather just stay where they are with their really
cheap mortgages than sell at a lower price than what
they are hoping to get. And if you're in that
(03:53):
position where you want to upgrade, or you want to
even just move across town, maybe you got a new
job and you want a shorter commute, it's really to
do that because of how much higher mortgage rates are.
You'd have to give up that cheap mortgage rate. Three
percent perhaps and get a much higher rate. Right now,
thirty year fixed rates are at about six and a
half percent, and that could mean hundreds, if not thousands
(04:13):
of dollars more each month you would have to pay
just for a lateral move. So many people are saying, no,
that's not worth it. I'm just going to stay where
I am. Some people are deciding to move, and they're
finding this work around where they rent out the home
or they have the cheap mortgage and then they decide
to rent their next home instead of doing the whole
(04:33):
selling and buying thing again. But that can be pretty complicated.
I think a lot of people just feel stuck, like
they're just gonna, you know, stay where they are because
it's better than facing this really expensive market.
Speaker 2 (04:45):
Am I holding myself back by feeling stuck? Am I
actually stuck?
Speaker 1 (04:49):
Is it a bad decision to go and buy the
one point five million dollar house that I'd have to
That's like what you would have to have a budget
for to get the size house I'm thinking about in
my in New York?
Speaker 2 (05:01):
But that to me is just so astronomically expensive. Am
I holding myself back? Is it as scary as I'm
making it? Out to be at our rates as scary
as they've seem.
Speaker 3 (05:11):
Well, there's definitely a real financial reason why people are
deciding to stay because of that rate difference, but there
are also some psychological reasons why people aren't moving. One
is that the economy is just really uncertain, and a
lot of people don't want to sign up for an
expensive mortgage when they feel like their job might not
be as secure as it was a couple of years ago.
Another thing that might be at play is the status
(05:32):
quo bias people feel. People tend to just stick with
what they are doing because doing something new is scary
and uncertain, and that keeps people in the status quo
even when they might have something better waiting for them.
And then another thing that might be happening is that
people might not feel comfortable stepping down from home ownership.
(05:53):
The housing market, yes, it's very expensive, if you look
at the rental market, it's actually more affordable right now.
For the first time since the Great Recession, we saw
and decrease in the number of homeowner households, and at
the same time there was an increase in renter households.
Because if you're comparing apples to apples, say a one
bedroom condo to a one bedroom apartment. It's very obvious
(06:15):
that the apartment is going to be cheaper to rent
than the condo is to buy. But a lot of
people when they bought, they bought single family homes, and
there just aren't that many single family homes available to rent,
so it's harder to make that transition from homeowner to renter.
And then also you're losing that status as a homeowner.
So there might be more options out there than maybe
you're considering. But maybe those options, you know, they're too
(06:36):
big of a change for you to give up the
home that you're in.
Speaker 2 (06:40):
Yeah, I mean, I just had a guest on, a
couple of guests on this week. They're best friends of
twenty years, two women, they each have children. They had
come out from each getting divorces and decided, listen, we're
just going to pull our finances together, move and buy
a house together. And one of the reasons they're in
the DC area.
Speaker 1 (06:57):
One of their reasons was the the homes that they
were looking at were like to rent, like to rent
for them. For the size home they were looking for,
it actually worked out to be a little bit more
economical to purchase a house. But you're saying that in
some areas, is this like nationwide that renting has become
a little bit more affordable than buying in a lot
(07:19):
of areas. Is that nationwide or are there like pockets
where that's happening.
Speaker 3 (07:22):
It's pretty much true nationwide. I think the only exceptions
were Detroit in Houston, where it's still more affordable to
buy than it is to rent. The reason why renting
is more affordable is because the rent, like when someone
is renting out an apartment, they're not really considering what
their mortgage is like, just trying to get somebody to
rent that out, so the price is much more flexible.
(07:44):
But homeowners and home sellers have been really they've been
really sticky about their prices. They're not willing to accept less.
And that might go back to this bias where people
tend to value something that they owned more because it's theirs,
and I think that's one reason homeowners are willing to
lower their price. We're actually seeing homeowners delist their properties
or choose not to sell at all instead of lowering
(08:06):
their prices.
Speaker 2 (08:07):
Or you're just hoping to get more and more so
you can afford that next step up? Yes, are you
still seeing as many people moving to less expensive markets
at a time like this? And I wonder if that's
changed since there's been this year. I think twenty twenty
five was we were already heading there, but it was
definitely the year of the return to office orders. So
(08:29):
a lot of folks are now you know, I know,
before during the pandemic, you could move to a lower
cost area and buy a house and whatnot. Now it's
getting more challenging. But is that still Are you still
seeing Americans packing up and moving in pursuit of more
affordable housing.
Speaker 3 (08:46):
That still happens, but in general, fewer people are moving
at all. And that goes back to the fixedness of
the housing market, where people are stuck where they are
because of that luck and effect from mortgages. But it
also has to do with the fewer firms are hiring.
Employers are hanging on to the employees they have and
not opening up new roles. And one big motivator for
(09:08):
people to move is that they have some new job
opportunity where they have an income that's at least better
relative to the cost of living. So we're not seeing
as many people move period right now, we have heard
anecdotes about people having to return to office, like somebody
who bought a home and say Boise, Idaho back during
the pandemic and then getting called back to the office
(09:28):
in San Jose. San Jose is the most expensive housing
market in the country, and if you move left that
area to go somewhere cheaper, and you're trying to move
back and it can be very difficult to re enter
into the housing market. So some of those people are
choosing to rent instead. Yeah, I mean, I think there's a.
Speaker 2 (09:43):
Lot of people who I mean I talked to them
all the time where they'll get that return to office order.
And for me, it's kind of like a.
Speaker 1 (09:49):
Soft way of laying off people. We didn't lay people off.
We just told everybody they got to come back to
the office. And for all the reasons you just laid out,
it's just not financially feasible. It's so expensive to move. Okay,
So rate wise, I mean, the FED just reduced rates
by a quarter of a percentage point, right that was
(10:09):
not that long ago.
Speaker 2 (10:11):
Do we how long until we'll start to see mortgage
rates respond? Like when is it going to get a
tiny bit more affordable or are we going to see
any changes.
Speaker 3 (10:20):
You think, Well, mortgage rates actually came down before that
FED meeting because investors in the market knew that that
rate cut was coming and people who purchased mortgage backed
securities already reacted, and that allowed mortgage.
Speaker 2 (10:32):
Rates to fall.
Speaker 3 (10:33):
So mortgage rates are at lows compared to the last
three or so years, but they're still very far off
from those pandemic levels. There was a point where we
had above seven percent rates for a thirty year fixed
rate mortgage, and now it's down to six point five,
six point four or six point three. It kind of
bounces around. We anticipate that next year rates will continue
(10:55):
to fall because I mean, the hope is that inflation
becomes us so the problem there are also some worrisome
signs in the labor market that unemployment is ticking up,
and that would mean that the FED would have to
cut again. So margag rates will probably be lower next year,
but it's definitely not a guarantee. I mean, we forecasted
that last year and it just didn't happen because we
(11:16):
got the tariffs instead. So anything could really happen in
this economy.
Speaker 2 (11:22):
Heyba fam we're going to take a quick break, pay
some bills, and we'll be right back. Yeah. And I
mean it's not just the rates that are you know,
even if they're going up a little bit, they're still
expensive relative to where they were a few years ago.
But it's like everything else that goes into home ownership
is getting more expensive. Furniture, Like, we need a new couch.
It's about seven years and we had two kids, a dog.
(11:43):
Our couch was rough. We had to get rid of it.
And we're looking at prices and they're just three thousand
dollars for a regular couch. And that could be partially
to do with like tariffs if you have these couches
being made overseas and the cost of supplies to do
any upgrades. Has your data reflected any changes in how
homeowners are, Like, are we holding back from you know,
(12:06):
doing renovation upgrades or upgrading our furniture and everything else
that goes into home ownership is that being impacted as well?
Speaker 3 (12:12):
You're right that the cost associated with home ownership have
been going up. The cost of home maintenance has been
going up, the cost of insurance has been going up,
especially in places that are prone to climate change. Like
wildfire prone places in California or floodplone prone places in Florida.
So yeah, these hidden costs are starting to creep up
and up. One way that people get money for those
(12:35):
costs is that they might refinance their mortgage, get a
second mortgage, get a heelock. But rates also impact how
affordable is to take money out of your home. So
if you bought your home during the pandemic or before
the pandemic, chances are you have a lot of equity
in your home. But people aren't really willing to tap
that equity at these high rates because they're having to
spend more money just to get their equity out, and
(12:58):
people would rather just waigh for rates to come down.
So people might be delaying these kinds of expenses. Yeah,
one hundred percent people, I am people.
Speaker 2 (13:07):
What advice do you have for someone who is maybe
a first time home buyer wants to get into the
market and is just not sure if this is the
right time to buy.
Speaker 3 (13:16):
I think the first step is to figure out what
can you afford? So that means looking at your budget
and seeing how much of your income you would have
to spend on housing and does that make sense given
the type of home that you want to buy. If
you can actually afford that mortgage, great, You're going to
actually have a really easy time in this housing market.
Because there are so few buyers. There are more listings
(13:39):
than there were a year ago. Sellers are a bit
more willing to come down in price. We're seeing that
the sale to list ratio, which is how much home
self or relative to their list price, has been coming down.
Sellers aren't willing to budge all that much because, like
I said, they still have this option of staying in
their homes and keeping their mortgage rate. If you look
at new construction, that's where we'll that's where you'll see
(14:00):
the most deals. New construction tends to be more expensive
than the existing homes because they're brand new, but builders
are a lot more willing to negotiate. They might even
give you a deal on an interest rate or give
you cash at closing. So if you can afford that
new construction, you'll actually have a pretty easy time getting
a good deal on it.
Speaker 1 (14:18):
I'm literally out my window right now, this behemoth of
a new construction house that my neighbor you used to
be an empty lot next to me for years and
we're like, oh, it's so nice, we have some space.
Didn't realize it was just a lot waiting to be sold.
And yet mega house next to me, which just looks
so hilarious in this neighborhood that's slowly being gentrified.
Speaker 2 (14:39):
I live in a largely middle income, middle class Black
and Latino neighborhood. It's kind of a gem and a rarity.
Speaker 1 (14:47):
And where I live outside of Manhattan and Westchester, which
is kind of known for like the land of the
Clintons and you know, the upper middle class elite. You
leave Manhattan and you want a family, you want some space,
you moved to Westchester, and my neighborhood is just such
a I don't know. I don't want it to become
a relic, but I'm wondering how have these trends in
the housing market impacted neighborhoods like mine, where, you know,
(15:09):
thirty forty years ago, a middle income Black or Latino
family could move and you know, really build some equity
and build some you know, start their home ownership journey here.
Speaker 3 (15:20):
Well, one thing that could help with that is if
that lot specifically, instead of it being developed into it
sounds like a McMansion, like a giant single family home,
if it was allowed to be developed into smaller homes
like perhaps rowhouses where you can fit more than one
home on the same lot, but they're really close together,
or a duplex or a triplex. That can lower the
(15:40):
entry point for somebody who wants to buy into the neighborhood.
If we just allow for more dense housing. Not everybody needs,
you know, a three thousand square foot home with a
front yard and a backyard. A lot of times people
just want access to what the neighborhood has to offer,
whether that be schools, or amenities or job opportunities. So
if we allow for more affordable types of homes to
(16:03):
be built when they're newly built, that can kind of
alleviate that problem. But just being these really expensive homes
that only really wealthy people can afford.
Speaker 2 (16:11):
Yeah, and then so much of what dictates what can
be built and where that has to do with your
local governments, right, Like you're my thinking about the town hall,
the not the board of education.
Speaker 1 (16:23):
But like these local you know, local municipalities, they can
they decide who can build and wear right, they're the
ones approving permits and approving what type of housing do
y'all do any analysis of, like our local governments making
any changes to allow for more affordable housing to be built.
Speaker 3 (16:41):
Yes, so you've identified a very big problem, which is
local control of housing. It is these local planning boards
that usually consist of existing homeowners in the neighborhood deciding
what housing is allowed to be built. And the problem
with that is is that the only voices that tend
to be heard are people who are already pretty well situated.
They already own homes, maybe they bought those homes, you know,
(17:02):
decades ago when not everybody had access to these neighborhoods
or access to credit, and they're the ones deciding who
gets to become a first time home buyer. The voices
of people who want to move into the neighborhood, or
the voices of young people who want to be able
to afford a home one day are not heard when
you just have this local control. So what we're seeing
nationwide is more of a move towards state control of housing.
(17:26):
In California, they have allowed for any single family home
to have two additional dwelling units built on it, so
that essentially can turn a single family home into a triplex.
You could put grainy flat and adu additional dwelling unit
in the backyard and then like another suite inside the
home and allow for just more housing to be built
(17:47):
on what would have only allowed for one family before.
And we've seen legislation to allow for more condos, more
missing middle housing they call it like townhomes and other
states like it really doesn't it doesn't fit the normal
left right spectrum. We're seeing this in California, Montana, Florida, Texas.
We've seen a lot of progress recently, but there's definitely
(18:09):
more progress that needs to happen.
Speaker 1 (18:11):
Yeah, I think I've seen that play out in my
area because we're close to a city.
Speaker 2 (18:16):
Which is of course more diverse as it tends to be.
And then I'm like on the in between where the
city kind of begins and where the more like where
it gets a lot wider and wealthier, And you're not
seeing affordable or more condos and multiplexes being built here,
But if you just go a mile down the road
closer to downtown, you are seeing like a lot of
condos being built up. And you're right, I mean, these
(18:37):
Westchester are elite. They are the loudest and the most
present they're available at these random times when these meetings
are happening to use their voices. But yeah, it is
a good you know, in terms of like feeling helpless
and like how what do we even do in this
kind of economy. It's like one thing is actually go
to those meetings, try to get organized in your community
and show up and electificial who are for more affordable housing. Yeah,
(19:04):
it's it's it's tough. I also think property taxes, my god,
like I'm thinking about you know, one of the as
like you mentioned, you know, when you were able to
buy your home a while back, and you can build
up a lot of equityay, but in a place every
year we get a letter from our our town and
(19:26):
it's like, congratulations, you have your home is worth fifty
thousand more dollars and by the way, we're going to
raise your taxes even more.
Speaker 1 (19:35):
And I mean, it's getting to the point now where
my property taxes are inching up to be half the cost.
Speaker 2 (19:41):
Of my mortgage. And it to me that is one
of the most crippling parts of home ownership right now.
It seems a little out of my control. Any advice
for homeowners who are feeling that pinchip like property tax
assessments and how much more expensive it could make home ownership.
Speaker 3 (19:58):
Yeah, so property taxes can be one of these hidden
costs that people don't really think about. When people buy
a home, they think, great, my house and costs are fixed,
I don't have to worry about my rent going up
every single year. But in many parts of the country,
your propery taxes might be large and they might increase.
Speaker 2 (20:15):
One of the things to be.
Speaker 3 (20:16):
Aware of about how propery taxes work is that your
local government needs to fund itself, right, It needs to
fund schools, it needs to fund local infrastructure, and they
are allowed to use property taxes to fund that. Usually
they can't tap into like income taxes, which are more
going to the state into the federal government. The more
homes that are allowed to be built in a municipality,
(20:38):
the larger the base is that they can spread those
costs across. So a lot of times homeowners they think
that like, if there are more homes built, that's going
to be bad for them because it will reduce their
property values. But the more homes that are built, the
more that the local government can be efficient with how
they raise tax revenue. They can spread that tax base
across more households, and that can actually make it your
(21:00):
property taxes don't go up as much as they would
have if there wasn't as much housing being built. So
I guess my advice, though, on a more individual level,
is to plan for those property taxes to go up.
And if you live in a place where you are
allowed to develop your property, and there are some people
who are are like kind of house hacking in a
(21:21):
way where they're renting out that additional dwelling in it
that they built, and that can be supplemental income that
can help offset some of those property taxes. I know
that's a big burden, but if you're really entrepreneurial and
you want to figure out how you can make the
most out of the property you own, you can actually
make your property something that is income generating.
Speaker 2 (21:40):
Heyba fam, we're going to take a quick break, pay
some bills, and we'll be right back. So I want
to talk about women of color in particular, and you know,
just you know our audience, Like I said, larger women
of color and a job market like this where even
if you are lucky enough to have a stable quote
unquote job right now, you may not be seeing your
(22:01):
wages increase as much, and at the same time, because
of the low inventory.
Speaker 1 (22:07):
That we have with housing that's still going on right,
it can feel really limiting and like you're looking at
the market and you're wondering, like, how are we gon
to be able to afford anything? I want to start
building a nest egg. Are there any programs or organizations
that could help, you know, make that pathway to home
ownership a little bit easier on us.
Speaker 3 (22:26):
These programs tend to be very local, like usually it's
a state program or even a city program where they
have down payment assistance. There's also programs run by the
federal government where you can get a mortgage with a
reduced down payment, and there are some programs where people
who want to fix up their homes. There are special
(22:46):
lending programs that the federal government has through Freddie Mack
and Fanny May where you can get loans, especially if
you are in a lower income band. There are also
and this is kind I mean, this is maybe for
people who live in more rural areas, but there's some
interesting programs run by USDA for homesteaders who want to
buy land that they live on and grow something agricultural there.
(23:10):
So that's just like an unknown program where you can
get actually pretty good benefits through that. So just throwing
that out there if anybody wants to start homesteading.
Speaker 2 (23:21):
It's a big thing on TikTok.
Speaker 3 (23:23):
Yeah, it is. And there's specifically ones for black farmers too.
So that's why for for brown people, I feel like
that's something that they might not have ever thought about.
Speaker 2 (23:33):
Okay, Yeah, I think it's just the manner of like
looking at the local level and asking and looking for
that kind of support.
Speaker 1 (23:40):
Yeah, So what else is, like, what do you what
are the biggest fact we've talked about. We've talked about jobs,
We've talked about tariffs, talked about the FED. Are there
any other outside forces that can explain the kind of
predicament that we're in housing wise right now that we
haven't touched on.
Speaker 3 (23:56):
Well, we're in a stagflationary econ name, which is a
fancy economics term that means that things are getting more
expensive at the same time that it's getting harder to
find a job. Normally you only get one or the other,
like the economy is either too hot and you have inflation,
kind of like we had post pandemic or the economy
is just in the gutter like we had during the
(24:18):
Great Recession, and nobody can find a job. But when
you have both problems at the same time, it's just
this there's like nowhere to go. There's something that the
Fed can really do because they can't lower interest rates
too much because that would mean prices would go up,
and they can't increase interest rates to fight inflation because
that would mean that the labor market would get worse.
So if you're feeling like this economy just kind of sucks,
(24:40):
it is because of stagflation, and stagflation really goes back
to tariff's. Tariffs make goods more expensive and it also
reduces the capacity for firms to produce those goods, which
hurts both prices and it hurts employment. So if you
want to blame something, I guess you can blame the tariffs.
There is there's some more challenges for the economy, like
(25:02):
what's happening with immigration. About a third of construction workers
are immigrants, and if we are not allowing those people
to come into the country or staying in the country,
and that can really hold back new construction. New construction
isn't doing so well right now anyway, just because of
how high interest rates are. But that could be another
stagflationary force on the housing market moving forward.
Speaker 2 (25:23):
Yeah, and that all comes back to we're not building more.
Speaker 1 (25:27):
I mean there was that number. I mean it's been
a couple of years now, I think, but four million.
We have some kind of crow and shortage of about
four million has that budget all or making any progress
toward that.
Speaker 3 (25:38):
It got a little bit better during the pandemic because
there was a construction boom. The construction boom was geographically
limited though it really only happened in the Sun belt
like Texas, Florida, Arizona, because that's where we allow homes
to get built. And now we're at the end of
that and we didn't build enough homes to get us
out of that that hole that we were in, and
(25:59):
now more people need home, so we're kind of back
to where we were when that number first came out,
which is that three point eight million number deficit?
Speaker 2 (26:07):
Oh neat. Yeah.
Speaker 3 (26:09):
Another thing that I should probably mention is that we
did some research recently on home ownership rates, and like
I said before, the number of homeowner households has gone down.
If you look at the home ownership rate. It's really
only Black households unfortunately, where their home ownership rate is declining,
and that might be connected to what's happening with these
federal layoffs. Black people are more likely to work federal jobs,
(26:31):
especially black women. Black women are more likely to be
the heads of their household than other races for that gender.
So yeah, I think I think that I think that
that's quite concerning that that demographic of people, they're becoming
less secure in their employment and that's spilling over to
less security in their housing.
Speaker 1 (26:50):
So is it that the rate has decreases that are
we losing our homes to foreclosure?
Speaker 2 (26:55):
Are we selling them? Like? Is there more information on
where that like, where that's client is coming from, like
how it's manifesting reality?
Speaker 1 (27:03):
I get.
Speaker 3 (27:03):
Yeah, it's not so much foreclosure, it's more people selling
their homes and then not becoming homeowners again and then
fewer first time home buyers.
Speaker 2 (27:12):
Yeah, we're getting kind of squeezed from both sides.
Speaker 1 (27:14):
And then you have my guests for earlier this week,
two black women who pulled their resources and you know,
got together and that was their pathway to you know,
being able to afford a house in this market. Daryl,
thank you so much for offering those insights. I want
to give you a chance to chat about your book,
because I'm never going to ignore a woman who has
a brand new book on shelves right now. So talk
(27:35):
talk to us about Hate the Game and what it's
all about.
Speaker 3 (27:38):
Sure, So I wrote Hate the Game Economic cheat Codes
for Life, Love and Work. It's all about how to
use economics to advance your career, to advance your goals
in life. I have some chapters about buying a home
and selling a home, but I also talk about things
like how to apply for a job, how to get promoted,
And it's all from this perspective of game theory, like
(27:59):
looking through your options, assessing what the options of other
people are, and then doing the logic to figure out,
like what is the best path forward, and how can
I make a decision that I feel really confident about.
I know that in this economy everything seems so unfair,
but one of the messages I try to convey in
the book is that you can win unfair games, Like
(28:19):
just because you're at a disadvantage doesn't mean you can't
you know, outsmart the system essentially and find a path
forward to get what you really want, and a lot
of that has to do with defining what is that
you actually want and just going for it.
Speaker 2 (28:32):
Okay, that sounds ju see. I'm going to need to
get a copy of that, all right. It's called hate
by my guest today, Darryl Fairweather, again, the chief economist
at Redfinn.
Speaker 1 (28:41):
Darryl, thanks so much for joining me on Brown Ambition.
I hope to have you back again soon.
Speaker 2 (28:45):
It'd be great to see you again, and it's nice
to have a grown up in the room when we're
talking about these housing trends that just kind of give
the anxiety.
Speaker 3 (28:53):
Thank you for having me.
Speaker 2 (28:55):
Thank you, Okay, v a fan, thank you so much
for listening to this week's show. I want to shout
out to our production team, Courtney, our editor, Carla, our
fearless leader for idea to launch productions. I want to
shout out my assistant Lauda Escalante and Cameron McNair for
(29:15):
helping me put the show together. It is not a
one person project, as much as I have tried to
make it so these past ten years, I need help, y'all,
and thank goodness I've been able to put this team
around me. To support me on this journey, and to
y'all bea fam I love you so so so so much.
Please rate, review, subscribe, Make sure you signed up to
(29:36):
the newsletter to get all the latest updates on upcoming episodes,
our ten year anniversary celebrations to come, and until next time,
talk to you soon via Buy
Hey, ba fam, Welcome back to Brown Ambition. This is
a very special episode like to call the Baqa where
we take your questions and try to offer some answers.
And usually I will qualify that by saying answers with
like a lowercase A.
Speaker 2 (00:18):
Please don't assume me. You'll know I'm not your financial planner,
not your investment adviser. You're definitely not your real estate
agent or your attorney.
Speaker 1 (00:25):
So you know, just here posting the show for ten
years talking to some badass brown women about their finances
in their career. But I am joined today by someone
who is a bit of an expert in her field,
probably at the top of her field. And it's not
every day you just talk to a bad ass brown
woman who is in economics and working at one of
the largest real estate I don't know technology firms in
(00:48):
the country, but I am.
Speaker 2 (00:49):
Very honored to be joined today by Darryl Fairweather. She
is a chief economist at Redfinn and she's here to
talk to us and hopefully help us, like bring a
little bit of sanity and under standing to what is
actually happening in the US housing market right now.
Speaker 1 (01:05):
So Darryl, thank you so much. For joining me on
broad ambition.
Speaker 3 (01:08):
Thank you so much for having me. I'm delighted to
be here.
Speaker 2 (01:10):
So tell us a little bit about what you do
at Redfin? What does one as a chief economist, and
especially in your particular cime, you said you focus a
lot on behavioral economics. So what are you up to
over there at Redfin?
Speaker 3 (01:19):
Yes, I study the housing market. We have so much
great data that I have access to at Redfin, data
about the housing market, and I connect that to the
broader economy and also to the decisions that our customers
make when they're buying or selling homes. I have a
team or we have a team of economists that analyzes data,
we put out research reports, and then I go and
communicate that research out to the broader public so that
(01:42):
people feel more confident when they're making a decision about
whethery're to buy or sell or rent, that they have
all the information that they need about how to make that.
Speaker 2 (01:51):
Decision for themselves. O p' a perfect person to talk to.
So what's actually happening on? What's going on? I'm stressed.
I told you a little bit about my and I
think a lot of the A listeners like I was saying,
a lot of us own homes, and we were first
time home buyers, got a little lucky. Our audience is
that elder millennial audience, you know, where some of the
(02:11):
ones who if you were lucky you got a house
before everything kind of went nuts post pandemic, when rates
were going up and housing affordability became such an issue.
Speaker 1 (02:21):
And I think I'm definitely in that camp of a
homeowner who is who's like, yeah, it's.
Speaker 2 (02:28):
Great to have. It's a good problem to have. But
I'm feeling really stuck. I live in such an expensive
market in New York, and you know, I have my
little house.
Speaker 1 (02:37):
And a cute little rate, but we're looking to got
I got two kids, want I want a bigger house,
some more space, and it just doesn't seem feasible. Like
I think, housing prices in my neighborhood are up fifty
percent from when I bought my house six years ago,
which is like, yay for me, I'm such a genius.
They're very lucky. But at the same time, if I
(02:59):
sell it for that, I have to go buy a
bigger house, which is going to be even more you
know what I mean. So can you help me feel
less insane. Is that just like, is that what you're
seeing in your data?
Speaker 3 (03:09):
That's exactly what we're seeing in the data. There are
record low amount of sales happening right now. There was
this boom in sales that happened during the pandemic because
of how low mortgage rates were. Everybody who could buy
a home did buy a home, and everyone who already
had a home they refinanced their mortgage and got a
record low rate. Now, after that, we saw mortgage rates increase.
(03:31):
And normally, when mortgage rates increase, that means that there
are fewer home buyers out there, and that means that
sellers have to lower their prices to meet home buyers
where they're at. But that did not happen because homeowners
would rather just stay where they are with their really
cheap mortgages than sell at a lower price than what
they are hoping to get. And if you're in that
(03:53):
position where you want to upgrade, or you want to
even just move across town, maybe you got a new
job and you want a shorter commute, it's really to
do that because of how much higher mortgage rates are.
You'd have to give up that cheap mortgage rate. Three
percent perhaps and get a much higher rate. Right now,
thirty year fixed rates are at about six and a
half percent, and that could mean hundreds, if not thousands
(04:13):
of dollars more each month you would have to pay
just for a lateral move. So many people are saying, no,
that's not worth it. I'm just going to stay where
I am. Some people are deciding to move, and they're
finding this work around where they rent out the home
or they have the cheap mortgage and then they decide
to rent their next home instead of doing the whole
(04:33):
selling and buying thing again. But that can be pretty complicated.
I think a lot of people just feel stuck, like
they're just gonna, you know, stay where they are because
it's better than facing this really expensive market.
Speaker 2 (04:45):
Am I holding myself back by feeling stuck? Am I
actually stuck?
Speaker 1 (04:49):
Is it a bad decision to go and buy the
one point five million dollar house that I'd have to
That's like what you would have to have a budget
for to get the size house I'm thinking about in
my in New York?
Speaker 2 (05:01):
But that to me is just so astronomically expensive. Am
I holding myself back? Is it as scary as I'm
making it? Out to be at our rates as scary
as they've seem.
Speaker 3 (05:11):
Well, there's definitely a real financial reason why people are
deciding to stay because of that rate difference, but there
are also some psychological reasons why people aren't moving. One
is that the economy is just really uncertain, and a
lot of people don't want to sign up for an
expensive mortgage when they feel like their job might not
be as secure as it was a couple of years ago.
Another thing that might be at play is the status
(05:32):
quo bias people feel. People tend to just stick with
what they are doing because doing something new is scary
and uncertain, and that keeps people in the status quo
even when they might have something better waiting for them.
And then another thing that might be happening is that
people might not feel comfortable stepping down from home ownership.
(05:53):
The housing market, yes, it's very expensive, if you look
at the rental market, it's actually more affordable right now.
For the first time since the Great Recession, we saw
and decrease in the number of homeowner households, and at
the same time there was an increase in renter households.
Because if you're comparing apples to apples, say a one
bedroom condo to a one bedroom apartment. It's very obvious
(06:15):
that the apartment is going to be cheaper to rent
than the condo is to buy. But a lot of
people when they bought, they bought single family homes, and
there just aren't that many single family homes available to rent,
so it's harder to make that transition from homeowner to renter.
And then also you're losing that status as a homeowner.
So there might be more options out there than maybe
you're considering. But maybe those options, you know, they're too
(06:36):
big of a change for you to give up the
home that you're in.
Speaker 2 (06:40):
Yeah, I mean, I just had a guest on, a
couple of guests on this week. They're best friends of
twenty years, two women, they each have children. They had
come out from each getting divorces and decided, listen, we're
just going to pull our finances together, move and buy
a house together. And one of the reasons they're in
the DC area.
Speaker 1 (06:57):
One of their reasons was the the homes that they
were looking at were like to rent, like to rent
for them. For the size home they were looking for,
it actually worked out to be a little bit more
economical to purchase a house. But you're saying that in
some areas, is this like nationwide that renting has become
a little bit more affordable than buying in a lot
(07:19):
of areas. Is that nationwide or are there like pockets
where that's happening.
Speaker 3 (07:22):
It's pretty much true nationwide. I think the only exceptions
were Detroit in Houston, where it's still more affordable to
buy than it is to rent. The reason why renting
is more affordable is because the rent, like when someone
is renting out an apartment, they're not really considering what
their mortgage is like, just trying to get somebody to
rent that out, so the price is much more flexible.
(07:44):
But homeowners and home sellers have been really they've been
really sticky about their prices. They're not willing to accept less.
And that might go back to this bias where people
tend to value something that they owned more because it's theirs,
and I think that's one reason homeowners are willing to
lower their price. We're actually seeing homeowners delist their properties
or choose not to sell at all instead of lowering
(08:06):
their prices.
Speaker 2 (08:07):
Or you're just hoping to get more and more so
you can afford that next step up? Yes, are you
still seeing as many people moving to less expensive markets
at a time like this? And I wonder if that's
changed since there's been this year. I think twenty twenty
five was we were already heading there, but it was
definitely the year of the return to office orders. So
(08:29):
a lot of folks are now you know, I know,
before during the pandemic, you could move to a lower
cost area and buy a house and whatnot. Now it's
getting more challenging. But is that still Are you still
seeing Americans packing up and moving in pursuit of more
affordable housing.
Speaker 3 (08:46):
That still happens, but in general, fewer people are moving
at all. And that goes back to the fixedness of
the housing market, where people are stuck where they are
because of that luck and effect from mortgages. But it
also has to do with the fewer firms are hiring.
Employers are hanging on to the employees they have and
not opening up new roles. And one big motivator for
(09:08):
people to move is that they have some new job
opportunity where they have an income that's at least better
relative to the cost of living. So we're not seeing
as many people move period right now, we have heard
anecdotes about people having to return to office, like somebody
who bought a home and say Boise, Idaho back during
the pandemic and then getting called back to the office
(09:28):
in San Jose. San Jose is the most expensive housing
market in the country, and if you move left that
area to go somewhere cheaper, and you're trying to move
back and it can be very difficult to re enter
into the housing market. So some of those people are
choosing to rent instead. Yeah, I mean, I think there's a.
Speaker 2 (09:43):
Lot of people who I mean I talked to them
all the time where they'll get that return to office order.
And for me, it's kind of like a.
Speaker 1 (09:49):
Soft way of laying off people. We didn't lay people off.
We just told everybody they got to come back to
the office. And for all the reasons you just laid out,
it's just not financially feasible. It's so expensive to move. Okay,
So rate wise, I mean, the FED just reduced rates
by a quarter of a percentage point, right that was
(10:09):
not that long ago.
Speaker 2 (10:11):
Do we how long until we'll start to see mortgage
rates respond? Like when is it going to get a
tiny bit more affordable or are we going to see
any changes.
Speaker 3 (10:20):
You think, Well, mortgage rates actually came down before that
FED meeting because investors in the market knew that that
rate cut was coming and people who purchased mortgage backed
securities already reacted, and that allowed mortgage.
Speaker 2 (10:32):
Rates to fall.
Speaker 3 (10:33):
So mortgage rates are at lows compared to the last
three or so years, but they're still very far off
from those pandemic levels. There was a point where we
had above seven percent rates for a thirty year fixed
rate mortgage, and now it's down to six point five,
six point four or six point three. It kind of
bounces around. We anticipate that next year rates will continue
(10:55):
to fall because I mean, the hope is that inflation
becomes us so the problem there are also some worrisome
signs in the labor market that unemployment is ticking up,
and that would mean that the FED would have to
cut again. So margag rates will probably be lower next year,
but it's definitely not a guarantee. I mean, we forecasted
that last year and it just didn't happen because we
(11:16):
got the tariffs instead. So anything could really happen in
this economy.
Speaker 2 (11:22):
Heyba fam we're going to take a quick break, pay
some bills, and we'll be right back. Yeah. And I
mean it's not just the rates that are you know,
even if they're going up a little bit, they're still
expensive relative to where they were a few years ago.
But it's like everything else that goes into home ownership
is getting more expensive. Furniture, Like, we need a new couch.
It's about seven years and we had two kids, a dog.
(11:43):
Our couch was rough. We had to get rid of it.
And we're looking at prices and they're just three thousand
dollars for a regular couch. And that could be partially
to do with like tariffs if you have these couches
being made overseas and the cost of supplies to do
any upgrades. Has your data reflected any changes in how
homeowners are, Like, are we holding back from you know,
(12:06):
doing renovation upgrades or upgrading our furniture and everything else
that goes into home ownership is that being impacted as well?
Speaker 3 (12:12):
You're right that the cost associated with home ownership have
been going up. The cost of home maintenance has been
going up, the cost of insurance has been going up,
especially in places that are prone to climate change. Like
wildfire prone places in California or floodplone prone places in Florida.
So yeah, these hidden costs are starting to creep up
and up. One way that people get money for those
(12:35):
costs is that they might refinance their mortgage, get a
second mortgage, get a heelock. But rates also impact how
affordable is to take money out of your home. So
if you bought your home during the pandemic or before
the pandemic, chances are you have a lot of equity
in your home. But people aren't really willing to tap
that equity at these high rates because they're having to
spend more money just to get their equity out, and
(12:58):
people would rather just waigh for rates to come down.
So people might be delaying these kinds of expenses. Yeah,
one hundred percent people, I am people.
Speaker 2 (13:07):
What advice do you have for someone who is maybe
a first time home buyer wants to get into the
market and is just not sure if this is the
right time to buy.
Speaker 3 (13:16):
I think the first step is to figure out what
can you afford? So that means looking at your budget
and seeing how much of your income you would have
to spend on housing and does that make sense given
the type of home that you want to buy. If
you can actually afford that mortgage, great, You're going to
actually have a really easy time in this housing market.
Because there are so few buyers. There are more listings
(13:39):
than there were a year ago. Sellers are a bit
more willing to come down in price. We're seeing that
the sale to list ratio, which is how much home
self or relative to their list price, has been coming down.
Sellers aren't willing to budge all that much because, like
I said, they still have this option of staying in
their homes and keeping their mortgage rate. If you look
at new construction, that's where we'll that's where you'll see
(14:00):
the most deals. New construction tends to be more expensive
than the existing homes because they're brand new, but builders
are a lot more willing to negotiate. They might even
give you a deal on an interest rate or give
you cash at closing. So if you can afford that
new construction, you'll actually have a pretty easy time getting
a good deal on it.
Speaker 1 (14:18):
I'm literally out my window right now, this behemoth of
a new construction house that my neighbor you used to
be an empty lot next to me for years and
we're like, oh, it's so nice, we have some space.
Didn't realize it was just a lot waiting to be sold.
And yet mega house next to me, which just looks
so hilarious in this neighborhood that's slowly being gentrified.
Speaker 2 (14:39):
I live in a largely middle income, middle class Black
and Latino neighborhood. It's kind of a gem and a rarity.
Speaker 1 (14:47):
And where I live outside of Manhattan and Westchester, which
is kind of known for like the land of the
Clintons and you know, the upper middle class elite. You
leave Manhattan and you want a family, you want some space,
you moved to Westchester, and my neighborhood is just such
a I don't know. I don't want it to become
a relic, but I'm wondering how have these trends in
the housing market impacted neighborhoods like mine, where, you know,
(15:09):
thirty forty years ago, a middle income Black or Latino
family could move and you know, really build some equity
and build some you know, start their home ownership journey here.
Speaker 3 (15:20):
Well, one thing that could help with that is if
that lot specifically, instead of it being developed into it
sounds like a McMansion, like a giant single family home,
if it was allowed to be developed into smaller homes
like perhaps rowhouses where you can fit more than one
home on the same lot, but they're really close together,
or a duplex or a triplex. That can lower the
(15:40):
entry point for somebody who wants to buy into the neighborhood.
If we just allow for more dense housing. Not everybody needs,
you know, a three thousand square foot home with a
front yard and a backyard. A lot of times people
just want access to what the neighborhood has to offer,
whether that be schools, or amenities or job opportunities. So
if we allow for more affordable types of homes to
(16:03):
be built when they're newly built, that can kind of
alleviate that problem. But just being these really expensive homes
that only really wealthy people can afford.
Speaker 2 (16:11):
Yeah, and then so much of what dictates what can
be built and where that has to do with your
local governments, right, Like you're my thinking about the town hall,
the not the board of education.
Speaker 1 (16:23):
But like these local you know, local municipalities, they can
they decide who can build and wear right, they're the
ones approving permits and approving what type of housing do
y'all do any analysis of, like our local governments making
any changes to allow for more affordable housing to be built.
Speaker 3 (16:41):
Yes, so you've identified a very big problem, which is
local control of housing. It is these local planning boards
that usually consist of existing homeowners in the neighborhood deciding
what housing is allowed to be built. And the problem
with that is is that the only voices that tend
to be heard are people who are already pretty well situated.
They already own homes, maybe they bought those homes, you know,
(17:02):
decades ago when not everybody had access to these neighborhoods
or access to credit, and they're the ones deciding who
gets to become a first time home buyer. The voices
of people who want to move into the neighborhood, or
the voices of young people who want to be able
to afford a home one day are not heard when
you just have this local control. So what we're seeing
nationwide is more of a move towards state control of housing.
(17:26):
In California, they have allowed for any single family home
to have two additional dwelling units built on it, so
that essentially can turn a single family home into a triplex.
You could put grainy flat and adu additional dwelling unit
in the backyard and then like another suite inside the
home and allow for just more housing to be built
(17:47):
on what would have only allowed for one family before.
And we've seen legislation to allow for more condos, more
missing middle housing they call it like townhomes and other
states like it really doesn't it doesn't fit the normal
left right spectrum. We're seeing this in California, Montana, Florida, Texas.
We've seen a lot of progress recently, but there's definitely
(18:09):
more progress that needs to happen.
Speaker 1 (18:11):
Yeah, I think I've seen that play out in my
area because we're close to a city.
Speaker 2 (18:16):
Which is of course more diverse as it tends to be.
And then I'm like on the in between where the
city kind of begins and where the more like where
it gets a lot wider and wealthier, And you're not
seeing affordable or more condos and multiplexes being built here,
But if you just go a mile down the road
closer to downtown, you are seeing like a lot of
condos being built up. And you're right, I mean, these
(18:37):
Westchester are elite. They are the loudest and the most
present they're available at these random times when these meetings
are happening to use their voices. But yeah, it is
a good you know, in terms of like feeling helpless
and like how what do we even do in this
kind of economy. It's like one thing is actually go
to those meetings, try to get organized in your community
and show up and electificial who are for more affordable housing. Yeah,
(19:04):
it's it's it's tough. I also think property taxes, my god,
like I'm thinking about you know, one of the as
like you mentioned, you know, when you were able to
buy your home a while back, and you can build
up a lot of equityay, but in a place every
year we get a letter from our our town and
(19:26):
it's like, congratulations, you have your home is worth fifty
thousand more dollars and by the way, we're going to
raise your taxes even more.
Speaker 1 (19:35):
And I mean, it's getting to the point now where
my property taxes are inching up to be half the cost.
Speaker 2 (19:41):
Of my mortgage. And it to me that is one
of the most crippling parts of home ownership right now.
It seems a little out of my control. Any advice
for homeowners who are feeling that pinchip like property tax
assessments and how much more expensive it could make home ownership.
Speaker 3 (19:58):
Yeah, so property taxes can be one of these hidden
costs that people don't really think about. When people buy
a home, they think, great, my house and costs are fixed,
I don't have to worry about my rent going up
every single year. But in many parts of the country,
your propery taxes might be large and they might increase.
Speaker 2 (20:15):
One of the things to be.
Speaker 3 (20:16):
Aware of about how propery taxes work is that your
local government needs to fund itself, right, It needs to
fund schools, it needs to fund local infrastructure, and they
are allowed to use property taxes to fund that. Usually
they can't tap into like income taxes, which are more
going to the state into the federal government. The more
homes that are allowed to be built in a municipality,
(20:38):
the larger the base is that they can spread those
costs across. So a lot of times homeowners they think
that like, if there are more homes built, that's going
to be bad for them because it will reduce their
property values. But the more homes that are built, the
more that the local government can be efficient with how
they raise tax revenue. They can spread that tax base
across more households, and that can actually make it your
(21:00):
property taxes don't go up as much as they would
have if there wasn't as much housing being built. So
I guess my advice, though, on a more individual level,
is to plan for those property taxes to go up.
And if you live in a place where you are
allowed to develop your property, and there are some people
who are are like kind of house hacking in a
(21:21):
way where they're renting out that additional dwelling in it
that they built, and that can be supplemental income that
can help offset some of those property taxes. I know
that's a big burden, but if you're really entrepreneurial and
you want to figure out how you can make the
most out of the property you own, you can actually
make your property something that is income generating.
Speaker 2 (21:40):
Heyba fam, we're going to take a quick break, pay
some bills, and we'll be right back. So I want
to talk about women of color in particular, and you know,
just you know our audience, Like I said, larger women
of color and a job market like this where even
if you are lucky enough to have a stable quote
unquote job right now, you may not be seeing your
(22:01):
wages increase as much, and at the same time, because
of the low inventory.
Speaker 1 (22:07):
That we have with housing that's still going on right,
it can feel really limiting and like you're looking at
the market and you're wondering, like, how are we gon
to be able to afford anything? I want to start
building a nest egg. Are there any programs or organizations
that could help, you know, make that pathway to home
ownership a little bit easier on us.
Speaker 3 (22:26):
These programs tend to be very local, like usually it's
a state program or even a city program where they
have down payment assistance. There's also programs run by the
federal government where you can get a mortgage with a
reduced down payment, and there are some programs where people
who want to fix up their homes. There are special
(22:46):
lending programs that the federal government has through Freddie Mack
and Fanny May where you can get loans, especially if
you are in a lower income band. There are also
and this is kind I mean, this is maybe for
people who live in more rural areas, but there's some
interesting programs run by USDA for homesteaders who want to
buy land that they live on and grow something agricultural there.
(23:10):
So that's just like an unknown program where you can
get actually pretty good benefits through that. So just throwing
that out there if anybody wants to start homesteading.
Speaker 2 (23:21):
It's a big thing on TikTok.
Speaker 3 (23:23):
Yeah, it is. And there's specifically ones for black farmers too.
So that's why for for brown people, I feel like
that's something that they might not have ever thought about.
Speaker 2 (23:33):
Okay, Yeah, I think it's just the manner of like
looking at the local level and asking and looking for
that kind of support.
Speaker 1 (23:40):
Yeah, So what else is, like, what do you what
are the biggest fact we've talked about. We've talked about jobs,
We've talked about tariffs, talked about the FED. Are there
any other outside forces that can explain the kind of
predicament that we're in housing wise right now that we
haven't touched on.
Speaker 3 (23:56):
Well, we're in a stagflationary econ name, which is a
fancy economics term that means that things are getting more
expensive at the same time that it's getting harder to
find a job. Normally you only get one or the other,
like the economy is either too hot and you have inflation,
kind of like we had post pandemic or the economy
is just in the gutter like we had during the
(24:18):
Great Recession, and nobody can find a job. But when
you have both problems at the same time, it's just
this there's like nowhere to go. There's something that the
Fed can really do because they can't lower interest rates
too much because that would mean prices would go up,
and they can't increase interest rates to fight inflation because
that would mean that the labor market would get worse.
So if you're feeling like this economy just kind of sucks,
(24:40):
it is because of stagflation, and stagflation really goes back
to tariff's. Tariffs make goods more expensive and it also
reduces the capacity for firms to produce those goods, which
hurts both prices and it hurts employment. So if you
want to blame something, I guess you can blame the tariffs.
There is there's some more challenges for the economy, like
(25:02):
what's happening with immigration. About a third of construction workers
are immigrants, and if we are not allowing those people
to come into the country or staying in the country,
and that can really hold back new construction. New construction
isn't doing so well right now anyway, just because of
how high interest rates are. But that could be another
stagflationary force on the housing market moving forward.
Speaker 2 (25:23):
Yeah, and that all comes back to we're not building more.
Speaker 1 (25:27):
I mean there was that number. I mean it's been
a couple of years now, I think, but four million.
We have some kind of crow and shortage of about
four million has that budget all or making any progress
toward that.
Speaker 3 (25:38):
It got a little bit better during the pandemic because
there was a construction boom. The construction boom was geographically
limited though it really only happened in the Sun belt
like Texas, Florida, Arizona, because that's where we allow homes
to get built. And now we're at the end of
that and we didn't build enough homes to get us
out of that that hole that we were in, and
(25:59):
now more people need home, so we're kind of back
to where we were when that number first came out,
which is that three point eight million number deficit?
Speaker 2 (26:07):
Oh neat. Yeah.
Speaker 3 (26:09):
Another thing that I should probably mention is that we
did some research recently on home ownership rates, and like
I said before, the number of homeowner households has gone down.
If you look at the home ownership rate. It's really
only Black households unfortunately, where their home ownership rate is declining,
and that might be connected to what's happening with these
federal layoffs. Black people are more likely to work federal jobs,
(26:31):
especially black women. Black women are more likely to be
the heads of their household than other races for that gender.
So yeah, I think I think that I think that
that's quite concerning that that demographic of people, they're becoming
less secure in their employment and that's spilling over to
less security in their housing.
Speaker 1 (26:50):
So is it that the rate has decreases that are
we losing our homes to foreclosure?
Speaker 2 (26:55):
Are we selling them? Like? Is there more information on
where that like, where that's client is coming from, like
how it's manifesting reality?
Speaker 1 (27:03):
I get.
Speaker 3 (27:03):
Yeah, it's not so much foreclosure, it's more people selling
their homes and then not becoming homeowners again and then
fewer first time home buyers.
Speaker 2 (27:12):
Yeah, we're getting kind of squeezed from both sides.
Speaker 1 (27:14):
And then you have my guests for earlier this week,
two black women who pulled their resources and you know,
got together and that was their pathway to you know,
being able to afford a house in this market. Daryl,
thank you so much for offering those insights. I want
to give you a chance to chat about your book,
because I'm never going to ignore a woman who has
a brand new book on shelves right now. So talk
(27:35):
talk to us about Hate the Game and what it's
all about.
Speaker 3 (27:38):
Sure, So I wrote Hate the Game Economic cheat Codes
for Life, Love and Work. It's all about how to
use economics to advance your career, to advance your goals
in life. I have some chapters about buying a home
and selling a home, but I also talk about things
like how to apply for a job, how to get promoted,
And it's all from this perspective of game theory, like
(27:59):
looking through your options, assessing what the options of other
people are, and then doing the logic to figure out,
like what is the best path forward, and how can
I make a decision that I feel really confident about.
I know that in this economy everything seems so unfair,
but one of the messages I try to convey in
the book is that you can win unfair games, Like
(28:19):
just because you're at a disadvantage doesn't mean you can't
you know, outsmart the system essentially and find a path
forward to get what you really want, and a lot
of that has to do with defining what is that
you actually want and just going for it.
Speaker 2 (28:32):
Okay, that sounds ju see. I'm going to need to
get a copy of that, all right. It's called hate
by my guest today, Darryl Fairweather, again, the chief economist
at Redfinn.
Speaker 1 (28:41):
Darryl, thanks so much for joining me on Brown Ambition.
I hope to have you back again soon.
Speaker 2 (28:45):
It'd be great to see you again, and it's nice
to have a grown up in the room when we're
talking about these housing trends that just kind of give
the anxiety.
Speaker 3 (28:53):
Thank you for having me.
Speaker 2 (28:55):
Thank you, Okay, v a fan, thank you so much
for listening to this week's show. I want to shout
out to our production team, Courtney, our editor, Carla, our
fearless leader for idea to launch productions. I want to
shout out my assistant Lauda Escalante and Cameron McNair for
(29:15):
helping me put the show together. It is not a
one person project, as much as I have tried to
make it so these past ten years, I need help, y'all,
and thank goodness I've been able to put this team
around me. To support me on this journey, and to
y'all bea fam I love you so so so so much.
Please rate, review, subscribe, Make sure you signed up to
(29:36):
the newsletter to get all the latest updates on upcoming episodes,
our ten year anniversary celebrations to come, and until next time,
talk to you soon via Buy
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