RT Joe Consorti ⚡️ (@JoeConsorti)Housing affordability is at record lows. To get back to 2019 affordability, we would need:– A 38% drop in home prices– A 60% increase in household income– A 415-bps drop in mortgage ratesHow did the housing market get this bad?[Presented by @JoinHorizon_] https://t.co/aRgHqJury7 ...

Housing affordability is at record lows. To get back to 2019 affordability, we would need:– A 38% drop in home prices– A 60% increase in household income– A 415-bps drop in mortgage ratesHow did the housing market get this bad?[Presented by @JoinHorizon_] https://t.co/aRgHqJury7 ...

Everyone knows that home affordability is a massive problem in the United States. Now, of course, people always focus on what some of the drivers of the problem are. We don't have enough regulation at the local level that empowers builders to build more supply. You don't have enough supply, home prices end up being unaffordable.Also, the cost of capital is too high. Mortgage rates are through the roof. And so, if people can't afford the mortgage payment, obviously, homes become unaffordable as well.But one ...

Core Insights - Lennar Corporation has experienced a stock decline of approximately 25% over the past year due to affordability challenges, elevated mortgage rates, and decreasing margins affecting investor confidence [2] - The recent quarterly earnings fell short of expectations, raising concerns about the housing outlook [2] Financial Performance - In Q3 FY2025, Lennar reported revenues of $8.81 billion, a decline of roughly 6% year-over-year, which was below analyst predictions [3] - Net earnings dropped nearly 46% to $2.29 per diluted share, compared to $4.26 from the previous year, with adjusted EPS closer to $2.00 [3] Housing Market Dynamics - The average selling price for Lennar homes decreased to approximately $383,000, down from over $400,000 last year, as the company relied on incentives like mortgage-rate buydowns [4] - New orders increased by about 12% to 23,000 homes, but profit margins were adversely affected, with gross margin on home sales falling to 17.5%, down from over 22% the year prior [4] - Deliveries of 21,584 homes fell short of expectations of around 22,400, with a backlog of $6.6 billion indicating weaker visibility [5] Mortgage Rate Impact - High mortgage rates continue to be a pressing issue, pricing out many first-time buyers and those looking to upgrade, leading to price reductions and substantial incentives [6] - The uneven recovery in the housing market shows strong demand for entry-level homes, while luxury and move-up buyers are more cautious, complicating Lennar's position [7] Valuation and Investment Considerations - Lennar's stock is trading at a P/E ratio near 11x and a price-to-sales ratio of approximately 1x, significantly lower than high-growth technology stocks [8] - Operating margins are in the high teens, but recent decreases indicate fragility, with positive free cash flow supported by a robust balance sheet [8] - Fundamental pressures are evident, with decreased revenues and gross margins considerably lower than historical averages, raising sustainability concerns if high mortgage rates persist into 2026 [9] Historical Performance - Historical data indicates that Lennar has rebounded significantly slower than the S&P 500 during major downturns over the past two decades, suggesting that the recent selloff may not represent a buying opportunity [10]

Group 1 - Mortgage rates are currently at their lowest levels in a year, with a recent drop to 6.3% [13][48] - The Federal Reserve's recent rate cut by 25 basis points to 4.25% is expected to influence mortgage rates, although not directly [14][50] - Anticipated further rate cuts could lead to mortgage rates dropping to around 6% by the end of the year, potentially increasing the pool of eligible home buyers by 3 to 4 million households [12][13] Group 2 - Housing starts have shown weakness, with the lowest levels since May, indicating potential supply issues in the housing market [2][6] - There is a significant increase in home prices over the past five years, with some markets experiencing price appreciation of 50-60% [5] - The current housing permit data indicates a potential housing shortage, necessitating the removal of obstacles to home building [6][7] Group 3 - The construction industry faces challenges such as high permit costs, rising construction costs, and a shortage of skilled labor [8][9] - The need for more trade-skilled workers is emphasized, suggesting a shift in focus from traditional four-year college paths to trade schools [11] - The combination of high home prices, elevated interest rates, and rising costs of insurance and taxes continues to impact housing affordability [42] Group 4 - The housing market is showing signs of improvement, with a 21% increase in homes for sale from August 2024 to August 2025, and homes staying on the market longer [26] - 20% of home listings experienced price cuts last month, indicating a shift in seller expectations [28] - Despite lower mortgage rates, affordability remains a significant issue, with many buyers still facing challenges [38][42] Group 5 - The Northeast and Midwest regions remain competitive for sellers, while the South and West are shifting towards a buyers' market due to increased inventory and lower buyer activity [63] - The overall housing market is in balance, but conditions vary significantly by region [64]

Group 1 - The current high interest rates are exacerbating housing affordability issues, potentially hindering household formation and wealth accumulation for certain population segments [1] - The housing sector is significantly influenced by monetary policy, with low rates during the pandemic providing crucial support to housing companies [2][3] - Lower borrowing rates for builders are expected to help increase supply, but substantial changes in rates are needed for a significant impact on the housing sector [3] Group 2 - There is a nationwide housing shortage that is not cyclical and cannot be addressed solely by Federal Reserve policies [4] - Forecasting in the current economic climate is particularly challenging, with forecasters expressing uncertainty about their projections [5]

Core Insights - Mortgage rates have significantly decreased from recent highs, providing relief for buyers and refinancing opportunities for homeowners affected by the "golden handcuff effect" [1] - Despite improvements, experts caution that achieving true affordability in the housing market will require time [1] Market Dynamics - The housing market has seen limited movement since interest rates surged post-COVID-19 pandemic, with homeowners reluctant to sell due to low mortgage rates and potential buyers facing high borrowing costs and limited inventory [2] - Early signs of improvement in housing affordability are emerging, with indications of price drops, although official data has yet to confirm this trend [3] - Inventory levels in the real estate market are showing growth, contributing to a more balanced market and providing buyers with more options than in recent years [4][6] Mortgage Rate Trends - The average rate on a 30-year fixed mortgage fell to 6.35%, marking the largest weekly drop in the past year [7] - Mortgage rates have declined nearly 70 basis points from the 2025 high and about 150 basis points from the 2023 peak, improving near-term affordability [6][8] Future Projections - Interest rates are expected to remain in the low 6% range for at least the next year, with modest improvements in affordability anticipated [10] - Income growth is predicted to help alleviate financial burdens, although the pace may slow as the labor market cools [11] - While there is potential for modest improvement in housing affordability, a complete "unlock" is not expected in 2026/2027 [13]

Joining us now with the latest on trade talks, uh the future of Tik Tok and more, Treasury Secretary Scott Besson. Mr. . Secretary, uh it's good to have you on up.Even I can figure out where you are from that backdrop, Joe. Good to see you. Good to be here in London.And it's good to have you on. So we I I think you got obviously you have an earpiece in. So you heard what was in our headlines.We can Let's just go in order. um and talk about some of the things with uh with Steve Meyer that that we talk about ...

Core Insights - The American dream of home ownership is increasingly out of reach, with only 28% of homes in the U.S. being affordable for medium-income households [1] - High mortgage rates, which remain between 6.5% and 7%, are significantly impacting monthly mortgage payments and overall housing affordability [1][2] - Home prices have surged by 38% from $319,450 in 2019 to $439,450 in 2025, exacerbating the affordability crisis [3][4] Housing Affordability - A $400,000 mortgage at a 3% interest rate results in a monthly payment of approximately $1,600, while at a 7% rate, the payment jumps to $2,600, nearly doubling the cost [2] - To afford a $2,600 monthly payment, a household would need an income of $104,000, not including additional costs like property taxes and insurance [2] Wage Growth vs. Housing Prices - Wages have increased by 15.7% since 2019, but this growth is less than half the rate of housing price increases, leading to a decline in buying power for typical families [5] - The price range that most families can afford has decreased from $325,000 in 2019 to $298,000 in 2025 due to high mortgage rates and stagnant wage growth [4] Regional Disparities - Certain metropolitan areas, including Milwaukee, Houston, Baltimore, New York, and Kansas City, Missouri, have experienced the most significant loss of buying power since 2019 [6]

Core Viewpoint - Australia's home prices are projected to rise by approximately 5-6% over the next two years due to lower borrowing costs, although affordability issues may limit these gains [1][4]. Group 1: Home Price Forecasts - Analysts predict a 5% increase in home prices for this year, revised up from previous forecasts of 4% and 3.7% in earlier quarters [4]. - Home prices in major capital cities such as Sydney, Melbourne, Adelaide, Brisbane, and Perth are expected to rise between 4% and 7% this year and next [6]. Group 2: Impact of Interest Rates - The Reserve Bank of Australia's 75-basis point cuts since February have reduced mortgage repayments, supporting modest buyer activity [3]. - Rates are expected to bottom out at 3.1% early next year, down from the current 3.6% [3]. Group 3: Affordability Concerns - The national median home value increased by around 4%, from A$814,293 in January to A$848,858 in August, indicating high historical standards [7]. - Analysts are divided on purchasing affordability over the next 12 months, with some expecting modest improvements while others predict a worsening situation [8]. Group 4: Market Dynamics - Lower borrowing costs are anticipated to enhance household buying capacity, exerting upward pressure on the housing market [5]. - However, the chronic undersupply in the housing market raises concerns that increased demand could further exacerbate affordability issues [9].