The Housing Market Horror Story: Why Prices Must Fall!

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 Forget Halloween decorations—these housing stats are truly terrifying. According to Fannie Mae, affordability won’t return unless:

• Home prices collapse by 38%
• Incomes surge 60% (not happening)
• Or mortgage rates plunge to 2.35% (a fantasy without government distortion)

Boomers want stability, younger generations want affordability—and Washington’s reckless spending made this mess worse.

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
Oh boy, we got ourselves some by spooky housing statistics.
I want to share with you here. I am first
day of fall. Yes, I got a lot of kids
in our neighborhood and Halloween decorations are going up, so
we're going to do some real This is much scarier, okay,
scarer any Halloween decorations, scarier than going to those little

(00:38):
pop up stores there. What are they called spirit? Anyway? Okay.
According to Fanny May calculations, it would take one of
three things or combination for affordability housing affordability to get
back to where it was between twenty sixteen and two

(01:00):
thousand nineteen one, The median price of a single family
home would need to fall thirty eight percent to two
hundred and fifty seven thousand dollars from September's four hundred
and fourteen one thousand, three hundred and forty Either that

(01:23):
or median household income would have to rise more than
sixty percent to one hundred and thirty four thousand, five hundred,
or the mortgage rate would need to fall to two
point three five percent. Anybody, the only the most plausible

(01:47):
one out of the three would be for the housing
values to drop by thirty eight percent. And again, you
could force that hand, could fource that hand very quickly,
quite frankly, if you know, did a few things that
we've discussed here on the program, going after corporate ownership

(02:07):
of homes. There's a myriad of things that most certainly
could be done. I would welcome that, welcome that, But
boomers wouldn't. No, we have to hear come the boomers
once again, everyone's favorite generation. Yeah, three quarters of boomers

(02:27):
seventy say they value stability in their community over affordability
for younger generations to move in. Meanwhile, fifty nine percent
of boomer homeowners would vote for a political candidate who
prioritizes protecting home values even if it meant fewer people
could afford homes. And boomers that's that's their thing again. Yeah,

(02:57):
it never affects I client, we don't. It's one of
the things that Markowski investments when it comes to putting
together people's you know, hire financial portfolio, snapshoor, whatever you
want to call it. I don't recommend people to consider
their their primary residence as even an asset. Again, it's

(03:19):
more of an installment plan purchase, it really is. That's
how I look at buying a primary home. And everybody's like,
whoa LIW house going up value the my house? Okay,
that's great, Okay, you know, I get I guess if
you sell it, but you've got to move somewhere again.
Certain states make it a little bit more difficult to
making your current property tax being potable somewhere else. Taxes

(03:42):
are involved, all the money that you spent on the house,
all the I've got over this plenty of times here
on the program. We don't we don't like to consider
that you want to keep that outside. You know, without
a doubt, without a doubt, it would be beneficial, beneficial
for housing prices to come in line with reality, because

(04:03):
they're so far out of whack at this point time. Nobody,
nobody thinks you're going to see, you know, median household
income jump all of a sudden by sixty percent. And
if that was the case, what would happen? They'd be
talking all sorts of stuff about wage inflation, Then what
would happen to interest rates? They would skyr and oh
my god, inflace, she's got a troll. We're gonna get

(04:24):
wage inflation here. Mortgage rates going down to two point
three five percent, Yeah, that could happen if you know,
the government pulled a Luca Brasi with the lending industry
and forced this and got involved and started subsidizing. But
then again, okay, that wouldn't work either if you really

(04:47):
think about it, because if mortgage rates dropped a two
point three five percent, what would everybody do to their poems?
They would price them, They make it more expensive. You
you would have to if the government, you know, worse
to hand mortgage rates down like this. Even if they didn't,
you would have to also put a cap on what
people can sell homes for. You understand the problem here,

(05:07):
This is this big steaming pile of excrement that we're
dealing with. Yeah, that's all comes from our government spending
more money than we should in printing too much money.
That's actually what would solve the problem. Getting our fiscal
house in order would help, would help. Watch Dog on

(05:30):
Wall Street dot Com