By coinnews 
00:00 Speaker A
Well, single family housing starts and building permits sliding in April. This comes as home builder sentiment also saw a decline in May, falling to the lowest levels since 2023. While tariffs cast a cloud of uncertainty for housing affordability continues to be a bumpy road for potential home buyers. Lance Lambert, Rezi Club, co-founder and CEO joins us now to discuss. Lance, it is good to see you. I want to drill down, Lance, to start on this issue of affordability because I did see this interesting report this week. I don’t know if you saw this one, Lance, it showed that middle income home buyers making $75,000 could afford just 21% of the available listings nationwide in March. And that was compared, Lance, with 49% in 2019. So I guess to start, walk us through what is going on there, Lance, and then more broadly, when do you expect to see affordability improve here?
01:59 Lance Lambert
Yeah, so when taking into account home prices, mortgage rates and incomes, affordability is stretched at about almost the worst levels in about three and a half decades. Uh, yeah, 2023 when rates got up to 8% for average 30-year fixed mortgage rate was a little worse, but affordability is very strained. And unless, you know, home prices were to fall meaningfully, or mortgage rates were to come down half, uh, you know, one and a half percentage points, affordability is going to be in this strained environment. And so right now in the market, that’s created additional choppiness for builders right here. It’s still constraining turnover in the resale market. There’s not many transactions happening for existing home sales. And there’s a lot of home buyers still on the sidelines.
03:25 Speaker A
Lance, Adam Johnson here. And let me just sort of, I don’t know, play the devil’s advocate or pick this apart a little bit. I think you’re right that if rates come down, obviously by definition, that makes homes more affordable. But my feeling is that there’s going to be a feeding frenzy because there’s so much pent up demand. And so what you got on a lower mortgage, you’re going to give up because you’re probably going to be having to bid higher for that house. Do you see any truth to that?
04:07 Lance Lambert
Well, so if let’s say that there was a meaningful affordability improvement tomorrow, uh, in some of the markets that are still tight in the northeast and Midwest, that would, you know, unlock more the buyers, and those are still tight markets. But in a lot of the country, uh, you know, if there were to be an improvement for affordability here, it’s not necessarily going to open up the flood gates because there is building active inventory, especially in the Sunbelt, these golf markets, where if, you know, mortgage rates did come down, you know, uh, almost a percentage point, yeah, would unlock some demand, but those markets have still weakened. And they’re not, you know, this isn’t the pre-pandemic market.