Last week I wrote about how several metros in the Midwest are seeing decelerating home price growth as supply approaches pre-COVID levels, and today I want to focus on the bifurcation happening between different price tiers in the housing market. Nationally, housing transaction volumes remain low, and there’s good evidence that 30-year mortgage rates approaching 7% again has further depressed activity over the past couple months.

At the same time, rents and home prices are soaring in San Francisco, with Compass International Holdings finding that home prices in the city are up 25% year-over-year as the artificial intelligence boom turbo-charges the local economy and housing market.

What’s happening is a divergence between the low-end and high-end of the housing market. At the low end, potential homebuyers are constrained by affordability, high mortgage rates, and wages that in many cases aren’t keeping up with inflationary pressures. And then at the high end, buyers are more likely to have stock market wealth and home equity from existing homes to put into new homes, making affordability and mortgage rates less of a hurdle.

It’s not just a demand story, either — according to Redfin, active inventory levels for starter homes have fully recovered to pre-pandemic levels and continues to rise modestly while at the high-end inventory levels remain well below 2019 levels.

For the here and now, this is a pretty easy story to tell — older, wealthier buyers aren’t as affordability-constrained, and there are relatively fewer high-end homes to buy, so that segment of the market is stronger, while younger, budget-conscious buyers aren’t in a position to buy, and the inventory picture there is more balanced, so that tier of the market is weaker. Two very different metro areas — New York City and Phoenix — show high-end home price momentum outpacing low-end home price momentum recently after that not being the case for most of the past decade.

But dynamics in the 2010s led to where we are now, and new dynamics going forward are likely to keep this trend in place. What we now call the Great Recession ended in June 2009 according to the National Bureau of Economic Research, but the impact on households and the housing market lasted far longer. The unemployment rate didn’t peak until October 2009. Residential investment, on an inflation-adjusted basis, didn’t start to recover in a meaningful way until 2012.

And then importantly, aggregate home equity levels didn’t surpass their 2006 peak until 2016. Home equity is a lubricant of the housing market — underwater homeowners aren’t in a position to sell, and homeowners without healthy home equity cushions tend not to be in a position to trade up to bigger houses. The housing market of the past several years has been shaped by homeowners unable or unwilling to part with low mortgage rates, but most of the 2010s were constrained by homeowners not having the equity to move.

The impact of that is when housing demand began to recover in a more meaningful way in the mid-2010s, homebuilders quickly ran out of move-up buyers and pivoted to the entry-level. Here’s an excerpt from a Bloomberg article called the Return of the Affordable Starter Home in late 2015 talking about the shift:

Millennial demographics were an important factor as well. In the mid-to-late 2010s, the cohort of Americans born between the early 1980s and mid-1990s were in their 20s and 30s. Their adult milestones had been delayed by the Great Recession and the long, slow economic recovery, but they were finally starting to buy homes, and builders began targeting them as a source of growth. As this CNBC article from May 2017 noted, it was a tension for builders to provide the kind of affordability younger buyers needed without sacrificing too much in the way of profit margins:

Fast forward to today. If the housing market constraints of the 2010s were weak economic growth and a lack of home equity and buyer incomes, and the demographic opportunity for builders was young Millennials, the constraints today are broad affordability concerns and high mortgage rates, and the demographic opportunity for builders is middle-aged Millennials and those who already have substantial home equity cushions and household net worth. As this chart from John Burns Research and Consulting shows, over the next decade the US population of 40-to-54 year olds is expected to grow by 7 million people while the population of 25-to-39 year olds is expected to be essentially flat, growing by just 700,000 people.

As of the first quarter of 2026, 40-to-54 year olds have 2.5 times the assets that households under the age of 40 have. To the extent those households are looking to buy a first or trade-up home they’re simply interested in a higher price point than their demographic cohort were a decade ago.

Consider two scenarios over the next few years. In the first, the future looks more or less like the present — a continued AI boom, inflation pressures and interest rates stay high, continued stock market gains, and affordability remains constrained for buyers without stock market and home equity wealth who need to take out mortgages to buy homes. In that world, focusing on the high end of the market makes the most sense — those are the potential buyers who have the financial resources to buy, and that’s where the demographic growth is.

And in the other scenario, AI busts. The stock market falls, perhaps significantly, unemployment rises, and mortgage rates fall to the kinds of levels buyers and the housing industry have been waiting for — 5.5% or lower. In that world the very highest end of the housing market likely cools off, as well as San Francisco, but because there’s so much pent-up demand not just to buy but among homeowners looking to move in general, the positive impact of lower mortgage rates outweighs the negative impact of lower stock prices and higher unemployment. Something similar happened in the early 2000s as the stock market and tech economy busted and the housing market began to recover. In 2001-02, residential investment only detracted from real GDP growth in a single quarter. In this world, it’s still likely existing homeowners taking advantage of some combination of home equity wealth and lower mortgage rates who would be the first looking to buy. Even if the unemployment rate rose a couple of percentage points, that’s still 90%+ of workers remaining employed. That too would seem to favor the trade-up market, though perhaps more at the $700,000 to $1.25 million price point rather than $2 million and up.

Homebuilders, trying to lean into pockets of strength in a difficult environment, are slowly starting to adjust. On the company’s earnings call a couple weeks ago, Ara Hovnanian, the Chairman and CEO of Hovnanian Enterprises, said the following:

“we highlight the continued shift in our portfolio towards higher price points and higher value buyer segments. As we make the shift, we’re reducing our exposure to the most competitive entry-level price points and placing a greater emphasis on move-up buyers and active adult housing.”

In an investor presentation published this week, they highlighted this shift, and how they’re becoming one of the homebuilders with the highest average sales price of deliveries.

Part of what I believe is driving the divergence between the low and high-end of the housing markets is that the high-end of the market isn’t just about higher-quality building materials or more square footage, in many cases it’s about buying access to a good school district. Redfin came out with a report yesterday showing that nationally, homes in highly rated school districts cost 35% more than the average US home, with large variations by metro area.

It’s true that renting is much cheaper than homeownership in most of the US right now, and budget-conscious households are usually better off renting rather than buying and investing the savings in the stock market, but it’s often not possible to rent or buy an entry-level home in a good school district. For families with school-age children these sorts of rent-vs.-buy cost comparisons don’t matter as much as getting into a desirable school district even if the economics of doing that aren’t as favorable. This ties into broader K-shaped consumption trends throughout the US, where Vanderbilt University is booming while Syracuse University is struggling, Disney theme parks are able to maintain premium pricing while Six Flags is struggling, and so on.

The way I think this plays out barring a major shift in the economic or interest rate environment is builders increasingly move to serve the high-end of the market, and as people trade up, the houses they sell will increase the supply of entry-level homes. Prices for those homes remain under pressure given the continued difficult affordability environment and as entry-level homes compete with the rental market among households for whom cost dynamics matter more than school districts. Eventually rent-vs.-buy ratios for that segment of the market stabilize, which will have large impacts on entry-level homebuilders and communities with more moderate incomes but won’t be particularly relevant to the higher-end of the market which has remained resilient and should grow from here.

[Last chance to lock in the founding subscriber rate ($80/year) before it reverts to $100/year. Despite the challenging housing market conditions I’m really excited about the outlook for housing and think the green shoots in various parts of the market will be apparent before long, and I’m looking forward to writing and talking about it as it unfolds.]

Writing about the challenges facing homebuyers, the author says, “If inflation has not exactly devoured the dream, it has taken a painful bite out of it…The number of Americans who can afford first-class housing is dwindling. The traditional budget formula said that a family should spend no more than one quarter of gross income on housing. If they obey that rule, less than 10% of Americans can afford a median-priced house.”

That was published in Time Magazine in October 1981.

I’m struck by that passage, and my own experience with the housing market as a young person in the late 2000s and early 2010s, when thinking about the struggles of Gen Z when it comes to the housing market.

There was an eight to ten year period when it felt like young people would never own homes. In the mid-2000s it wasn’t just that prices surged, the housing market felt the way that crypto or online gambling has felt in recent years, something inherently risky and speculative. Then came the bust. And even after the bust, home prices and mortgage rates were low but Millennials were young and underemployed, and didn’t have the incomes or downpayments to afford to buy.

Beyond affordability math, people had been so shaken by the housing bust that homeownership was being questioned altogether. It was the era of buying experiences rather than things. In September 2012, the Atlantic published an article quoting Perry Wong, the director of research at the Milken Institute, who said that education was the “obvious outlet for the money Millennials can spend…In the past, housing was the main vehicle for investment, but education is also a vehicle.” From the standpoint of 2026 it’s hard to recall that higher education was seen as a more reliable institution than homeownership.

My own fascination with demographics and Millennials began around that time. I was looking for a reason to be optimistic about the economy at a time when unemployment was high and worries persisted about more home foreclosures, another wave of bank failures, and a double-dip recession. I was bullish on cities and felt like that’s where Millennials would end up buying homes. The cities view ended up being wrong – as we’ve seen, it’s very difficult financially and politically to build lots of the kinds of housing that families want in cities. And the suburbs have charms that a 45-year-old can appreciate in a way that a 30-year-old can’t.

Another thing I was wrong about is just how much of a winning lottery ticket buying a home in the 2010s ended up being. When my wife and I bought our current house in 2017 it felt like a reasonable deal. When we refinanced in 2021 it seemed like a prudent thing to do, especially with inflation on the rise, but if I knew mortgage rates would be in the 6s five years later I would have taken out a lot more money.

The mood of the times makes sense when you’re living through it. In the early 1980s it was high inflation and interest rates, and in the early 2010s it was high unemployment and a loss of trust in homeownership. We’re all prisoners of our experiences, and once a trend has been in place for years it’s hard to envision it ending. But the present is a poor guide to the future. The Baby Boomers who bought in 1981 at credit card interest rates likely never imagined how much housing wealth they’d end up with.

So when I read stories about Gen Z favoring the stock market over the housing market, I’m sympathetic. Homebuying remains unaffordable in much of the country. And stocks really have been a better place to put money over the past several years than housing.

There’s an argument that Gen Z is more financially savvy than Millennials were at similar ages. A JPMorganChase Institute report showed that 37% of 25-year-olds used investment accounts in 2024. In 2015 the share was only 6%. Ernie Tedeschi, the chief economist at Stripe, published a chart a couple months ago showing that the median net worth of Gen Z members in their 20s is higher on an inflation-adjusted basis than Millennials or Gen X had at the same age. From 2006 to 2010, the amount of student loan debt outstanding in the US doubled. It hasn’t grown like that in years. Gen Z has been investing in stocks while young Millennials were taking out student loans.

It’s fair to note that the main economic challenge confronting Millennials was high unemployment – there’s a reason people took out all that student loan debt, because they tried to do whatever they could to land a job. Gen Z’s challenge has been more about affordability, and stocks have been a way to keep pace in an economy where workers feel stuck while investors have gotten richer. So far the bet has paid off.

But that doesn’t mean Gen Z should extrapolate the present out to the future. The demographic outlook for them looking out to the 2030s is more favorable for homeownership than it was for young Millennials in the 2010s. In 2014, the Joint Center for Housing Studies of Harvard University published their State of the Nation’s Housing report. In it, they expressed concern about 2013 being the sixth consecutive year that housing starts in the US were below one million units. They forecasted that over the following decade, household formation would increase as Millennials aged into their 30s and moved out of their parents’ houses. Meanwhile, the aging of the Baby Boomer generation would drive household growth as well. Solid population growth and limited housing supply would lead to broadening affordability challenges. The COVID-related impacts on the housing market were unexpected but the demographic story was predictable over a decade ago.

The next 10 years will be different. In 2014, households over the age of 65 were owner-occupiers of 21.6 million homes. Today, it’s over 30 million homes. Freddie Mac estimates that in 2026, the number of Baby Boomer homeowner households will decline by 500,000, with that annual decline approaching one million households by the early 2030s. For younger Americans, every 100,000 houses sold by older homeowners means 100,000 new homes not needed to address the nation’s housing shortage.

But that supply won’t be evenly distributed. A glut of older homes in Ohio won’t address the housing needs of college grads who want to settle down in Nashville or Austin. We’re seeing leading indicators of this in higher education today, where the declining number of high school graduates is leading to under-enrollment at some places, but not the Ivies or flagship state universities. Syracuse is struggling while Vanderbilt is booming – we could be in for something similar in housing. It may mean new winners and losers at the metro level as Gen Z decides where to settle.

For their age, Gen Z is doing better on homeownership than the conventional wisdom. Eric Finnigan of John Burns Research and Consulting posted a chart this summer showing that even with the affordability challenges, for their age, members of Gen Z are becoming homeowners at the same pace that Millennials were. They have lower unemployment, have started investing earlier, and a better demographic outlook over the next decade than Millennials did.

The biggest risk to this view is the same risk facing all Americans over the next several years – a significant economic downturn that leads to a surge in unemployment, the kind of outcome that could happen if there’s an artificial intelligence bust. Otherwise, affordability for Gen Z will get better as they age and the supply picture improves, even if that takes a few years longer than they’d like. But in all likelihood, when people in 2040 are looking back on this period, they’ll wonder why anyone thought a generation with jobs, savings, and demographic trends on its side would never own homes.

At a national level, housing market trends are as “flat” as they’ve perhaps ever been. The pace of existing home sales has been stuck at a 4 million annual rate for the better part of four years. Home prices are generally unchanged. Resale inventory is no longer growing, a shift from the past couple years when supply growth was outpacing demand.

Yet those national aggregates mask important shifts happening at the regional and metro level. Over the past several years northern housing markets have generally been stronger than southern housing markets, with the latter going through a post-pandemic bust as migration slowed and prices corrected.

Looking at metro-level data in 2026 points to the early stages of a shift. Southern locales that already went through a correction are now showing signs of stability. And some – but importantly, not all – metros in the northeast and Midwest have lost momentum. The key factor that explains the emerging stability in states like Florida and Texas, metros like Indianapolis losing momentum, while Chicago stays strong is changes in supply.

The prevailing narrative is still that northern metros have tight supply and continue to see home price growth while southern metros have more supply than demand and downward pressure on home prices, and that’s largely a function of a table like this. Looking at active housing inventory in July 2025 compared to July 2019 showed inventory levels well below pre-pandemic levels in the north with inventory levels well above pre-pandemic levels in Florida, Texas, and Arizona.

The housing story in northern metros is largely one of “What never went up tends not to go down.” The largest publicly-traded homebuilders don’t have a very meaningful presence in the north. D.R. Horton, Inc., the largest homebuilder in the US, doesn’t operate at all in New England, New York, or Michigan, and has minimal operations in Minnesota, Wisconsin, Illinois, and Ohio, as shown in its 2025 annual report.

The second-largest homebuilder in the US, Lennar Corp., doesn’t operate in New England, Michigan, or Ohio.

The downturn in housing transactions and interstate migration made southern housing markets looser and northern housing markets tighter. At a normalized level of existing home sales — 5 to 5.5 million per year — some percentage of those sales are people selling in places like New York to buy in places like Florida. The reverse tends not to happen as much. When existing home sales levels are only 4 million per year that’s both lost transactions and lost out-migration, which means fewer sellers in northern metros than you’d otherwise expect.

Many northern metros also had relative affordability to fall back on. Cleveland, Pittsburgh, and Detroit have historically been cheaper than metros on the coasts or in the Sun Belt, so when home prices and mortgage rates surged in 2022 they still weren’t out of reach for buyers, even if they were no longer as cheap as they once were.

It’s possible we’re in a new normal — maybe southern states like Florida have permanently lost their cost-of-living desirability for retirees coming from northern states due to the rise in home values, interest rates, and home insurance costs — but it helps explain how we got here, with less out-migration in recent years than we saw in the 2010s. Places like New York City with extremely high housing costs and low supply need to build more housing, but a metro like Cleveland should be more unsure about whether the recent inventory shortage is a permanent state of affairs.

One housing executive who recently spoke to this is apartment REIT Chief Executive Officer Alex Jessett of Camden Property Trust. As the CEO of a Sun Belt-focused apartment REIT it’s fair to say he’s talking his book, but speaking on the Rent Roll podcast with rental housing economist Jay Parsons he said, “Would you rather invest in a market that has basically very, very, very low demand but low supply? Or would you rather invest in a market that has extremely high demand and occasionally has high supply? And to me this is a really easy answer, right? Follow the demand.” The thinking is that if you overbuild in a metro like Austin you can count on population and employment growth to eventually bail you out, but if you overbuild in Cleveland you can’t rely on demographics to be your backstop.

Over the past year there are now signs that inventory normalization is coming back to many northern metros that have spent the past few years with very low levels of inventory. Looking at July realtor.com data, active inventory is now growing at a solid clip in northern metros like Minneapolis, Buffalo, Cincinnati, and Indianapolis while it’s now declining throughout most of the Florida, Texas, and Arizona metros.

We’re now at a point where levels, first derivatives, and second derivatives for many housing markets are in different places. For instance, in Austin, the absolute level of active housing inventory is still elevated, but the number of homes for sale is now falling. Home prices in Austin are still falling, but not as fast as they were a year ago.

And on the flip side, Detroit still has fewer homes for sale than it did prior to the pandemic, but inventory is now growing at a steady rate. And while Detroit home prices are still rising, they’re not rising as fast as they were a year ago.

Momentum in Sun Belt markets is picking up, while northern markets are more mixed, as the chart below shows. Home price trends in almost all Sun Belt metros are becoming more positive while in many northern metros, home price growth is decelerating.

Notably, four metros where this isn’t the case are New York City, Hartford, Kansas City, and Chicago, which happen to be four northern metros that haven’t seen any meaningful active inventory growth over the past year.

The metros seeing the most rapid deceleration in home price growth are Detroit, Pittsburgh, Philadelphia, Cleveland, and Indianapolis. And while these two weren’t listed because they’re technically part of the South Census Region, Baltimore and Washington DC are in that range as well.

Deceleration/stagnation, not a bust

I would not expect northern housing markets to go through anything like what the metros in Florida and Texas did. Those places had a big increase in new construction to go along with a decrease in demand, and that supply was built at a time of rapid home price and rent growth and low interest rates. In some cases there was also likely some FOMO on the part of developers and home buyers when migration and market conditions were running hot.

The home price growth in northern metros over the past few years was mostly a function of very low supply. It’s hard to imagine someone buying a house in Pittsburgh or Cleveland and taking out a mortgage at a 6.5% interest rate was in the grip of a speculative frenzy, and there’s no risk of homebuilders suddenly having to clear out excess homes at low prices, to the extent homebuilders have been building there at all. If active inventory continues to grow from homeowners slowly putting their homes on the market some of these places could end up with years of stagnant home values, perhaps modest declines, but that shouldn’t lead to any structural issues and there isn’t much of a new residential construction industry to go through a downturn for a boom that never happened.

The possibility it does raise is, should these inventory and momentum trends continue, Texas and Florida metros once again showing stronger housing market performance in 2027 than slower-growing metros in the north, but that will depend on how the data unfolds over the next several months. At the moment I would expect Austin home prices to not only grow but to rise faster than home prices in many northern metros next year.

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But any institutional reform should start with where the Fed has screwed up, and how it could avoid those mistakes in the future. In the past 25 years, it’s made two major mistakes – responding too late to economic weakness in 2008, and responding too slowly to inflation coming out of the COVID-19 pandemic. In the first episode the Fed was too hawkish, and in the second, too dovish. Both times, the Fed wasn’t paying enough attention to signals coming from the housing market.

The reasons why the Fed should take housing seriously are straightforward. Two-thirds of households own their homes. The rest are exposed to housing through rent. For most households their homes are their largest financial asset, their largest monthly expense, their largest source of debt, or all of the above. Housing represents over 40% of the core measure of the Consumer Price Index, and roughly 18% of the Fed’s preferred measure of inflation, core PCE. Downturns in residential construction almost always coincide with recession. Housing is a key channel through which Fed policy works, and as we’ve seen over the past several years, a litmus test for how everyday Americans feel about the economy.

Yet it often seems like the Fed sees housing as, if not an afterthought, subordinate to other factors it considers more important. In the transcript of the October 2007 meeting of the Federal Open Market Committee, Kevin Warsh, then a Fed Governor, said, “The key over the medium term, however, is job growth and real disposable income, in my judgment more important than the negative wealth effects from housing.” This was at a time when home prices were already falling and residential investment was detracting 1% from GDP growth every quarter.

2007 wasn’t the only time the Fed downplayed the importance of housing. In June 2021, home prices were booming, with the Case-Shiller home price index rising almost 20% over the prior year. Rents were soaring. The housing wealth of Americans had increased by $6 trillion over the prior year, more than triple the largest annual increase seen during the mid-2000s housing boom. Yet in the statement the Fed, led by Jerome Powell, put out at its July 2021 meeting, housing wasn’t mentioned at all, with the rise in inflation attributed to transitory factors.

It often seems like commodity prices get the Fed’s attention more than housing, even though the US economy has become less sensitive to changes in energy prices over time. Only 4% of consumer spending goes towards energy goods and services – that’s roughly half of what it was in the early 1980s. And the Fed in theory looks past changes in food and energy prices. Yet high oil prices arguably kept the Fed from cutting interest rates faster in the first half of 2008 when unemployment was rising and we now know the US economy was already in recession. And after Russia invaded Ukraine, energy prices got specific callouts in the FOMC statements in 2022 when the Fed began aggressively raising interest rates. They never gave housing that kind of attention.

I think geography is a big reason why the Fed consistently seems to be a little blind to the importance of housing, and residential construction in particular. Out of the 12 Federal Reserve Districts, only two – Dallas and Atlanta – are centered in metro areas that still build a lot of homes. The regional Fed structure was put in place over 100 years ago, and its composition today isn’t very balanced when it comes to population or economic output.

And the path to becoming a Fed Governor tends to run through academia, public policy, or law – all reasonable on the surface for a policy-making job in Washington, DC. But these career paths don’t have a lot of overlap with the economies of metro areas that rise and fall with the fortunes of the homebuilding industry.

Thinking back to that July 2021 Fed meeting, I remember watching it live and finding it peculiar. I live in a well-educated suburb in Atlanta where at that point most people who wanted COVID-19 vaccines had gotten them. Two months prior we had taken our kids to Disney World. We had been there when the mask mandate was ended in the parks. Yet that July Fed meeting was still conducted on Zoom, and the beginning of the FOMC statement had comments on vaccinations and included the line “The path of the economy continues to depend on the course of the virus.” I recognize the fact that every community’s experience during that time was unique, and if I lived in DC maybe I wouldn’t have been as surprised. But it’s my belief that a Fed based in Dallas, Atlanta, or Tampa would have gotten out of a pandemic economy mindset and pivoted to inflation risks faster than the one based in Washington did.

I’d have two reform proposals for the Fed. The first would be changing its measure of shelter inflation to one based on market rents or home prices rather than measures like owners’ equivalent rent, which has significant lags because only a small percentage of leases are signed every month. From the standpoint of accurately measuring the shelter costs that Americans actually pay the current system works well, but from the standpoint of setting monetary policy the lags are too long. In June 2021 market rents and home prices were surging, while owners’ equivalent rent only increased 2.3% over the prior year. The inflation data the Fed relies on adjusts too slowly.

And the second would be creating a dashboard of housing-related metrics and watching it like the Fed already watches credit and financial market-related data. Just like the Fed doesn’t target levels for credit spreads or the stock market, the Fed shouldn’t target levels for home prices or homebuilding. But outlier moves should get the Fed into a risk management mindset.

Big changes in market rents and home prices should shift how they think about inflation risks. Downturns in residential investment or construction jobs should have the Fed on recession watch even if overall measures of job and income growth are fine, as Chair Warsh hopefully learned in 2008. Any unusual dynamics in mortgage credit channels deserve extra scrutiny because of what they can mean for home prices, household and bank balance sheets, and residential investment.

Right now is an especially good time to do this because housing and mortgage market activity is quiet. Transaction activity is low, construction activity is low, home prices and rents are relatively flat, and mortgage standards have been tight ever since the Great Recession. But it won’t stay that way forever. Better to put in place sensible reforms now, so that when the next housing cycle comes the Fed gets it right.

[A quarterly look at the apartment market using data and commentary from apartment REIT earnings calls and key takeaways will be an ongoing series.]

There are two dynamics to reconcile when thinking about the housing market and the performance of the economy this year. On the one hand, the aggregate homebuying and apartment data looks similar to last year. Existing home sales continue to chug along at around a 4 million sales-per-year pace, home price growth nationally is flattish, new home sales activity remains soft with homebuilders using aggressive levels of buyer incentives, and apartment rent growth remains negative in much of the Sun Belt.

And on the other, the unemployment rate is down this year, job growth has picked up modestly, and it’s been another solid year of stock market performance, boosting the net worth of those who own financial assets. That’s generally good for housing demand.

So how to make sense of this?

For homebuying, what we see in the data is the high-end market is relatively strong. The luxury market is growing even as the entry-level market sags according to Zillow. Compass International Holdings Market Research put out a piece this week focused on Florida showing how much the luxury segment is outpacing the rest of the market. The reasoning here is straightforward — the wealthy have cash and stock market wealth and are less impacted by economy-wide affordability concerns or the level of mortgage rates.

But everyone has to live somewhere, and for those without the wealth to buy homes with cash or less debt housing demand is still growing, even if they can’t afford to buy. And that’s showing up in the rental market.

Elevated new supply, but healthy demand as well

The dynamics over the past few years in many Sun Belt metros that built a lot of apartments this decade is they’ve been absorbing a lot of new supply, which has led to falling rents and elevated levels of tenant incentives, but at the same time demand has been relatively strong, which is impressive at a time when migration to the South has slowed down.

The metro that epitomizes this is Austin, Texas, which until the past few months has been arguably the weakest market for rent growth in the US. According to Apartments.com, Austin’s apartment inventory growth in the US over the past 5 years has outpaced every other metro.

Yet at the same time, for nearly the past two years, the net number of new apartment units being leased in Austin has been as high as it was at the peak of the metros’s housing boom in late 2021.

What’s bailed out apartment operators over the past few years as migration and job growth have slowed is poor homebuying affordability has led tenants to keep renting longer than in the past. In an investor presentation put out in June, Camden Property Trust, a large apartment REIT focused on Sun Belt metros, showed that the percentage of their tenants moving out to purchase a home has been well below normal levels for the past few years. From a landlord’s perspective every additional tenant you retain is one less tenant you need to find.

From a purely economic standpoint renting makes more sense than owning right now, and despite the prevailing concerns around affordability rent-to-income ratios for the large apartment REITs are the lowest they’ve been in years. UDR, an apartment REIT with 60,000 units in 22 markets in the US, published the following two charts showing these dynamics in a recent investor presentation using end of 2025 data.

Importantly, supply dynamics have been shifting for awhile as the apartments started during the boom years get completed and lease up, while the drop in new apartment starts over the past few years ensure that deliveries are much lower over at least the next two years. A chart posted by RealPage last year shows this — 2024 was the peak year for deliveries, with 2025 being lower but still elevated, 2026 being lower still, and then very low levels of deliveries expected in 2027 and 2028.

There was hope last year that the inflection in market dynamics in heavily-supplied metros would have happened by now. But an apartment building completing construction is only part of the process — it then has to be leased up, which takes a year or longer, especially when job growth and in-migration have slowed and there are a bunch of other buildings trying to be leased up.

It’s taken until the past few months for apartment operators to really embrace green shoots and an improvement in market conditions. If the past three years were about Sun Belt and many western markets absorbing a glut of new apartments and slowing job and migration growth, the outlook from here looks very different. New deliveries are going to be much lower. Rising rents in pricey coastal metros like New York and San Francisco combined with falling rents in most Sun Belt metros make the economic case for migration more compelling. And a pickup in migration combined with the AI spending boom should mean the job market remains at least resilient, possibly picking up.

Here are some quotes from the management teams of apartment REIT operators on their second quarter earnings calls over the past few weeks speaking to dynamics I think are important now and over the next several quarters. Due to the merger between AvalonBay Communities and Equity Residential we didn’t get earnings calls from those companies (now Vivmark Residential) this quarter, so next quarter there will be an even larger pool of comments to draw from.

West Coast markets — Seattle/LA lagging behind San Francisco

San Francisco remains a standout market with the strongest revenue growth across our portfolio, driven by blended lease rate growth [a mix of new leases and renewal leases] of approximately 13% and occupancy in the high 97% range. —Mike Lacy, COO, UDR

Demand starts with Northern California, and that’s really the center of the innovation engine. What we have seen over multiple cycles is that it starts with Northern California and then expands out to Seattle. We’re already seeing public announcements of expansion to Seattle. It does take time for companies, once they make the expansion announcements, to then build out the office space, then hiring then follows. There’s always a lag. —Angela Kleiman, President and CEO, Essex Property Trust

At the end of the day, if you look at Southern California, while it is a lag for the West Coast, it is still a solid long-term market, generating 1.4% blended rent growth with occupancy above 95%. —Angela Kleiman, President and CEO, Essex Property Trust

Austin momentum

Austin showed the best momentum in blended lease rate growth coupled with 97% occupancy. —Mike Lacy, COO, UDR

Austin, obviously one of the highest concessionary markets, one of the most challenged with supply, is quickly changing…If you look at the beginning of last year, 2025, we’ve seen occupancy improve six quarters straight…Second quarter 2025 occupancy was at 94.7%, and this quarter we just delivered 96.1%…We’re currently in July, our occupancy is sitting at 96.6%. As occupancy firms up, concessions burn off, and we have the ability to improve our pricing. You’re just starting to see that play out. —Laurie Baker, President and COO, Camden Property Trust

If you actually look, Austin is showing the highest improved momentum across all major US markets. This is not a Camden number. This is across all operators in Austin…If you look at March, signed new leases in Austin were down 11%. If you look at July, they’re down 3%. That still is a negative, but that is 800 basis points better than what we saw in March. —Alex Jessett, CEO, Camden Property Trust

Austin, though still an underperforming market, showed good momentum and achieved blended lease or re-lease pricing that was 300 basis points better and occupancy that was 40 basis points better than the second quarter of 2025. —Tim Argo, Chief Strategy and Analysis Officer, Mid-America Apartment Communities

Affordability

San Francisco is definitely our strongest market in the portfolio…we’re also seeing low rent-to-income ratio. Even with rents moving as fast as they are, we have the ability to capture that today because those rents were so depressed from that COVID era. —Mike Lacy, COO, UDR

You had 41 months so far where we’ve had rents that have basically been flat or down in most markets. —Ric Campo, Executive Chairman, Camden Property Trust

Our resident health remained strong, as reflected in an improvement in our rent-to-income ratio to 18% and continued strong performance in collections with net delinquency representing just 0.3% of bill grants. —Tim Argo, Chief Strategy and Analysis Officer, Mid-America Apartment Communities

Rent growth outlook becoming more favorable

One of the questions I’ve been asked the most over the past couple of years is when Camden will start registering positive signed new lease growth. As you know, we have dynamic pricing, which changes daily, and I’m happy to report that system-wide average signed new leases have been positive a handful of days this month, including at least two days this week, and that is a very green shoot. —Alex Jessett, CEO, Camden Property Trust

This is the first time in several years that we can sit here and tell you we’ve seen system-wide some positive new leases. It’s an absolutely wonderful green shoot for us. —Alex Jessett, CEO, Camden Property Trust

Where we see the optimism and where we think we’ve made the right decisions is what we’re seeing in August, September. First, if we look at renewals for the entire Q3, we have retention rates well above what we saw this time last year, well above what we saw in Q2 —Tim Argo, Chief Strategy and Analysis Officer, Mid-America Apartment Communities

On the demand piece, you look at absorption the first half of the year that Tim talked about, second quarter absorption across our markets was 1.8x new delivery. We’re seeing really strong demand. As we continue through the balance of this year, we certainly believe that more of our markets start to show some of the stronger pricing power, particularly as we look at the blended rates in the third and fourth quarter. —Brad Hill, President and CEO, Mid-America Apartment Communities

Supply outlook

Especially given the fact that supply continues to be lower than long-term averages this year, and projected to be that way for the next three years at least. —Brad Hill, President and CEO, Mid-America Apartment Communities

Financing difficulties

We’re not seeing an uptick in starts coming. In fact, we continue to find opportunities to partner with those developers on additional projects because their equity partners have backed out of projects. I think the ability to find capital, equity capital in particular for new developments continues to be challenged. We’re not seeing that really change at the moment. —Brad Hill, President and CEO, Mid-America Apartment Communities

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The bar to new construction being so high is my concern as I look ahead to the next few years when we’re going to need more apartments and office space. Apartment and office market dynamics have started to shift, but we’re not in the free money era anymore. Construction costs are much higher than they were in the pre-pandemic era. Shovels in the ground won’t happen until investors are convinced that nosebleed rents are coming.

The tower being developed by Vornado and Rudin Management going up at 350 Park Avenue in Midtown Manhattan will provide 1.8 million square feet of office space at a cost of almost $3,500 per square foot. Citadel will take around a million square feet, and for the rest, asking rents are expected to be as high as $350 per square foot. The building won’t open until 2032.

So if you’re Ken Griffin and you’ll personally back the financing, you think you can get record-setting rents, and you’re willing to wait until 2032, you can build a new office tower. But most developers aren’t Ken Griffin.

And this matters because for the best buildings in the best submarkets we’re running out of space. Vornado CEO Steven Roth said on the company’s second quarter earnings call earlier this month, “Office leasing volume in Manhattan is at its highest level in 25 years. Vacancies in the 180 million square feet Class A building market in which we compete are now down to 6.2%.” Overall office vacancy rates don’t capture this. When it comes to aging office buildings, we’re not overbuilt, we’re under-demolished.

Econ 101 might suggest that a shortage of premium space isn’t the end of the world – as that fills up or gets more expensive tenants can move into cheaper, lower-quality buildings. We see this in housing all the time. But that hasn’t been the trend in office in the post-covid world. Employers have decided that the way to get workers into the office is by being in the newest buildings with the best amenities. Office REITs have decided to focus on the highest-quality assets and jettison the rest, like shopping malls in the internet era.

And these days not all landlords are created equal. A Vornado or a Cousins down here in Atlanta – they’re not going anywhere. They’ve got the best buildings, the best tenants, and solid financing. But older buildings that are half full? You can’t be sure those landlords are going to stay solvent – signing a multi-year lease is like buying 10 years’ worth of gift cards from Sears. Even if the lights stay on, if all the other tenants leave you end up as the last store operating in a dead mall. It’s led everyone into a flight to quality.

One possibility for some employers is moving jobs or doing hiring in the Sun Belt, which we hear all the time from CEOs who complain about politics and the cost of business in the northeast and on the west coast. But the shortage of trophy space is an issue down here too. In a recent interview, Colin Connolly, the CEO of the aforementioned Cousins office REIT, said that in the Buckhead Atlanta office submarket there’s really only about 7.7 million square feet of truly class A office space. That’s 17 buildings. And in those 17 buildings, only two currently have available blocks of contiguous space greater than 50,000 square feet.

Here’s what I think happens next. Office leasing will remain solid, with demand still focused on the best, newest buildings. That’s going to lead to a supply crunch in the strongest office submarkets. Investors won’t be willing to commit capital to lower-quality buildings to fix them up. If they turn more positive on office in general they’ll first focus on trophy buildings or new development. And any new building that gets financing today won’t open until at least 2030. The most likely outcome is rent growth ramps up next year, and then an air pocket in 2028 or 2029 where companies are scrambling to find space before any new supply can come online.

And that looming shortage of high-quality office space is going to ripple into housing and migration dynamics. The Cousins CEO also noted that for companies looking to relocate to the Sun Belt, the cost of housing for their employees matters more than the cost of office space.

The rental market in places like Austin and Nashville and Charlotte has been weak for the past three years, with those metros dealing with the impacts of a slowdown in migration and a glut of new supply. But now rents in the Sun Belt metros that built a lot have become relatively cheap, and supply is tapering off. Meanwhile the amount of available high-quality office space in Manhattan is shrinking and housing costs in San Francisco are exploding. We’re finally poised for a new cycle of Sun Belt migration.

That’s happening at a time when the apartment data is starting to turn. CoStar reported that the national apartment vacancy rate fell vs the same time a year ago for the first time this cycle. Austin’s vacancy rate fell nearly 300 basis points. The rental economist Jay Parsons noted that in July, two of the strongest apartment markets were Boise and Reno, which were poster children for metros that boomed and busted since 2020.

This is where the difference between apartment and single-family housing construction matters. If homebuying demand improves a little bit, D.R. Horton can have more houses ready to go in four months. Apartment developers have a lot more hoops to jump through. They need external financing. They might need zoning approvals from local governments. You’re generally talking about at least a two year development cycle, sometimes longer.

So even if apartment developers got the green light to build more by the end of the year, those units wouldn’t be hitting the market until 2029.

And that kind of rapid turnaround in development doesn’t seem likely. Camden Property Trust, one of the bigger Sun Belt apartment REITs, has been focused on buying back stock rather than new development. Their stock price remains 20% below its NAV, or the company’s view of the value of its assets. If a company thinks its stock is being valued at 80 cents on the dollar it’s the market telling management to hold off on new supply.

Camden’s new CEO, Alex Jessett, also made the point that all the supply that was built in the Sun Belt over the past several years was in an era of free money. That’s not likely to come back any time soon.

Think about all the obstacles in the way of a new apartment construction cycle. Investors are gun-shy after so many apartments built in the early part of the decade performed poorly. Interest rates and construction costs are a lot higher than they were five years ago. It’s easier to sell your investment committee on a data center or AI project than an apartment building in the South. It’s going to take more than a couple quarters of rent growth to restore confidence, and after that it’ll be at least another couple years before supply could hit the market.

Here’s where I could be wrong. The rebound in office leasing demand could taper off. Maybe tenants are more willing to trade down to class B office space than I realize. A new development cycle could kick off earlier than I think – maybe investors get worried about having portfolios too concentrated in AI and look to diversify. And obviously, “AI could bust and change everything” belongs as a caveat for any economic call these days.

If you’re a tenant I’d be watching your local market carefully. If you’re renting in Austin or Nashville, think about signing a two-year deal now before your landlord has the leverage. If your office lease is up for renewal, sign that new contract while you can. Landlords see that conditions are shifting in their favor but aren’t pushing rent increases aggressively quite yet. But next year all bets are off.

An understandable concern to have about the claim that the housing recession is over is that the national residential construction data trend is tenuous at best. For instance, nominal spending on new single-family construction is still declining modestly on a year-over-year basis.

And on a year-over-year basis, single-family building permit growth is little-changed after modest declines in 2024 and 2025.

On the surface, this all fits the pattern that much of the economy has shown over the last several years. There was a decline in 2022 as pandemic booms ended and the Federal Reserve raised interest rates. Perhaps there was a modest recovery akin to a dead cat bounce in 2023. Since then, unless it’s tied to artificial intelligence, there’s been a general stagnation or freeze — hiring has been low, job quitting has been low, layoffs have been low, existing home sales have been low, home prices haven’t really gone anywhere, residential construction has been sluggish, and so on.

But a lot has happened within the homebuilding industry and geographically since then which now has the industry poised for growth again.

The False Alarm for Builders

Homebuilders in the first half of 2022 were dealing with extreme bottlenecks, supply chain disruptions, and inflation. Lumber prices surged. You may recall reports of homes that were otherwise completed that were still missing key components like garage doors. In the second quarter of 2022, DR Horton, the largest homebuilder in the US, said that their average construction cycle times — how long it takes them to build a home — increased by two weeks compared to the first quarter, and over two months from the prior year. Because the construction process was so backlogged, homebuilders didn’t feel the impact of interest rate increases immediately as much as they otherwise would have. It was a bit like an ice cream shop with a line out the door saying that no new customers could join the line — even if the line starts to shrink, the store itself will remain busy for awhile serving customers already in line.

The slowdown in demand was arguably helpful for builders and homebuyers alike. Toll Brothers, a top-10 public builder focused on high-end buyers, talked about some buyers in 2022 being quoted with 14-month wait times and deciding not to move forward rather than having to wait that long and deal with the uncertainty.

The way the middle part of 2022 played out nationally is homebuying demand and new orders fell sharply, but because builder backlogs were so full, construction spending declines took until the latter part of the year to start to show in the data, and those tended to be at the early phase of the construction process. Contractors installing garage doors were still busy even if the early part of the construction process was beginning to soften.

And then homebuilders caught another break in 2023 because the supply of resale homes was so low. After a modest spike in new listings in the summer of 2022 as sellers raced to beat the impact of higher mortgage rates, new listings plunged as “mortgage rate lock-in” took effect, with sellers being unwilling to give up their 3% mortgage rates. Lumber prices plunged, giving builders a little breathing room on their profit margins even as they were now operating in a more difficult environment. And they were able to offer mortgage rate buydowns — offering a 5% rate to buyers even if prevailing mortgage rates were 6.5% — as an incentive to help customers with affordability.

The North and South Diverge

But as 2023 turned into 2024 several dynamics emerged. There was an initial hope that inflation would quickly recede, allowing the Fed to aggressively cut interest rates, and mortgage rates would drop back below 5%. That didn’t happen. Mortgage rate lock-in and a “low hire, low fire” labor market meant that migration from the coasts and the North to the South ground to a halt. The cumulative impact of all the housing construction in southern metros started to lead to an increase in inventory. All of that began to put pressure on rents, home values, and homebuilder profits, with homebuilders being more exposed to softening markets in Florida and Texas than supply-constrained markets in New York and Illinois.

By last summer, active housing inventory in Florida, Texas, and a handful of other southern and western states was substantially above pre-pandemic levels, while inventory remained far below pre-pandemic levels in northern and Midwestern states.

2026: Inventory Growth Momentum Abates

Last fall, delistings began to spike in Florida as frustrated sellers took their homes off the market. A reasonable view to have was that this was a more concerning version of what played out in late 2022 and 2023, as sellers tried to wait out difficult market conditions rather than selling into an environment of weak demand. The risk was those sellers coming back into the market in the first quarter of 2026, leading to much lower home prices, forcing homebuilders to pull back, and putting more stress on an already fragile housing market.

But in early 2026, resale inventory in Florida began to fall. Notably, in their late-January earnings call, PulteGroup talked up strength in new orders in several of their Florida metros — Fort Myers, Naples, Palm Beach, Vero Beach, Fort Lauderdale, and Orlando. That suggested the stability in inventory wasn’t just from frustrated sellers choosing not to list their homes but reflected improving demand as well.

Looking at the sales order backlogs of the four largest publicly-traded homebuilders shows that after backlogs fell for most of 2023 through 2025 as deliveries exceeded new orders, backlogs are now growing again. Collectively, these builders account for almost a third of all single-family home construction in the US.

The shift that began in Florida in January appears to be happening in Texas now. Resale inventory is beginning to decline on a year-over-year basis statewide. Apartment operators spent their most recent earnings calls talking up improvement in Austin — occupancy rising, rents no longer falling as fast as they were even a few months ago.

And all three of the largest publicly-traded homebuilders now have growing sales order backlogs in the state as well (NVR, the fourth-largest builder, doesn’t have a Texas presence).

The upshot of the housing market turning in Florida and Texas is that in addition to representing a huge share of the homebuilding industry — over 25% of all single-family homes built in 2025 — these were the hardest-hit states coming into the year, and downside risks to housing and employment were the main reasons to be worried about the US economy in 2026. It’s no surprise that the inventory picture improving in Florida and Texas has coincided with employment in their states starting to pick up.

The question from here is whether we get a modest recovery in housing, where perhaps transactions pick up, home prices are stable, and homebuilding is stable, giving the Fed more time to watch the data to see how the path of inflation evolves, or whether we get a more robust housing recovery, which alongside the AI boom would probably lead to broad-based economic overheating and a series of interest rate hikes.

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This is a big reason why homebuilders have been struggling. Interest rates had been high ever since the Fed raised rates a lot in 2022, but for awhile builders made it work because there just weren’t that many homes for sale, and they had tools like interest rate buydowns to help people with affordability.

That dynamic had started to change in 2024 but especially last year. Sellers slowly lost patience, and the number of homes for sale began piling up in the South and much of the West. Prices began falling. It started dawning on people that we weren’t going to see 5% mortgage rates any time soon. Nobody wants to buy an asset that’s falling in price, and that’s what housing became. For most people, renting was cheaper than buying, with money left over to invest in stocks.

Here’s the concern I had coming into the year. Inventory would keep rising. Sellers would get more desperate. Prices would fall faster. Buyers would get even more skittish. Homebuilders would cut production and jobs. It’s the kind of thing that’s led to recessions in the past.

But in January there were signs of a shift. Inventory stabilized in Florida. To be fair, there were still plenty of homes for sale in the state. Some of what happened was probably frustrated sellers taking their homes off the market. But still, it meant maybe things weren’t going to keep getting worse.

In February the housing market got some help from interest rates. It’s been awhile, but that’s when everyone was freaking out about the impact of AI on the labor market. Software stocks got destroyed. People were talking about office jobs like we were in that moment in February 2020 right before COVID shut down the US. All that worry helped push 30-year mortgage rates to 6%.

But then the conflict in Iran broke out. The Strait of Hormuz was closed. Oil prices and interest rates spiked. Housing stocks got crushed. By the end of March, mortgage rates were back over 6.5%. Consumer confidence plunged. If there were ever a time when the housing market was going to crumble, it was here.

But it didn’t. Mike Simonsen, the chief economist at Compass, showed in mid-April that the war hadn’t caused a spike in inventory. In fact, inventory was starting to shrink compared to a year ago. Pending home sales had dipped a bit but hadn’t plunged. The war had caused the housing market to stagger but it was still standing.

May and June showed signs of improvement even without help from mortgage rates. Compass and Redfin said in their weekly market reports that pending home sales were up. Several homebuilders noted in their earnings reports that their use of incentives was down and their profit margins were up. PulteGroup, the third-largest homebuilder in America, said that their orders in Florida were up 19% from a year ago.

And then there’s San Francisco. Just like the AI boom transforming the city’s economy, home prices and rents are rising rapidly. Through June, home prices in the city are up 9.2% vs last year according to Redfin. According to Apartment List, rents in the city are up a whopping 23%. And the leading AI companies – OpenAI and Anthropic – haven’t even gone public yet. When they do, their thousands of employees and investors will have access to tens if not hundreds of billions of dollars of wealth, and some of that will no doubt find its way into real estate.

At the high end of the housing market, that stock market wealth is what to watch. In much of the country – places like Phoenix and Dallas and Atlanta – home prices have been flat for 4 years. But over that time the S&P 500 is up 80% and the Nasdaq has doubled.

The job market is also now in a better place. The unemployment rate has been falling all year. Jobless claims are down. Job postings are up. Construction and manufacturing jobs are increasing again. So are white-collar jobs, which is a notable change from last year.

What hasn’t picked up is worker confidence. I’ll be honest, in January I was worried about some of the AI doom scenarios for workers. Hiring had been weak for two years. Unemployment was up. The release of Claude Code felt like a real moment in the discourse. But the way things have evolved since then make me feel better about the outlook for workers. AI keeps getting better but the job market data has clearly improved. Consumers remain unhappy about affordability and high interest rates but they keep spending. Maybe AI will come for all our jobs one day, but it won’t happen in 2026.

Here’s the state of play for housing heading into the latter part of 2026. The two weakest states coming into the year – Florida and Texas – have signs of life. In Florida, inventory is down and sales are up. In Texas, inventory is stable and Austin is quickly getting “less bad.”

Nationally, inventory levels are stable. There are still fewer homes for sale now than there were prior to the pandemic. Most of the North and Midwest never even had a slump and still don’t have enough homes. The rise in mortgage rates is holding back improvement but generally not making conditions worse.

Both homebuilders and apartment managers showed more optimism this quarter than they have in years. Builders have reason to believe incentives have finally peaked and profit margins have bottomed. For apartments, occupancy is up and there’s no glut of supply coming any time soon.

And at the high end of the market, stock market wealth means it doesn’t matter where mortgage rates are.

But pockets of weakness remain. Cities like Seattle are still struggling. The entry-level market remains tough. Some metros and submarkets have a glut of inventory. Affordability obviously remains challenging for people who aren’t already rich.

But the housing recession that began in early 2022 is over.

I went back and looked at other lengthy housing recessions. We had one from 1979 to 1982 when the Fed nuked the economy with tight money – four years. We had another from 1988 to 1991 coinciding with the Savings and Loan crisis and the first Gulf War – also four years. The Great Recession from a housing perspective lasted 6 years – 2006 through 2011.

And then we have today. This housing recession began in the first quarter of 2022, which is now 4.5 years ago – almost a half decade. Existing home sales have been stuck around Great Recession levels for 4 years. Homebuilders have pulled back. Apartment development has slumped. The number of homes for sale surged in the places that boomed the most during the pandemic housing frenzy.

But from here the picture looks different. Inventory in Florida and Texas is now falling. Unemployment is down. Stock market wealth is at a record high. The worst for homebuilders seems behind us. Apartment vacancy rates are beginning to fall. Several publicly-traded homebuilders have been bought out just in the past few months.

These are the signs of an industry in recovery, even if the vibes feel bad.

In the weeks and months to come, I’ll be talking more about where I think things are going with these podcast essays. I’ll also be posting charts and analysis on substack. I hope you’ll subscribe and follow along. Thanks for reading.

In the middle of March, 2020 a couple friends who were 40 years old and in the middle of buying a home reached out to me. What should they do? We were at peak uncertainty with COVID-19 lockdown underway. The stock market had crashed, and the big fiscal stimulus programs weren’t obvious yet. Nobody knew what would happen, but I told them household balance sheets were in good shape, mortgage underwriting had been incredibly conservative over the past decade, affordability was reasonable, mortgage rates were low, and there was pent-up demand from Millennials hitting their family-forming years. Maybe home prices would go down for a bit but they had their families to think about – I’d go ahead and buy.

We joke about that moment now, because none of us imagined home prices would surge over the next two years and the housing market would end up where it did. We were all just doing the best we could at a noisy and scary time. I’ve spent my career making sense of the housing market so that people can make informed decisions rather than panic. The Housing Frame represents my belief that there’s more need for that than ever in an emotional, cluttered media environment.

How I came to love housing

Growing up in the northeast – I spent half my childhood in suburban Washington, DC, and the other half in suburban Boston – a house was just a pile of sticks and bricks to me, somewhere to live. I then moved to Southern California for college – the part of the region where Los Angeles ends and the Inland Empire begins. Watching new development sprout up in places like Ontario, Fontana, and Rancho Cucamonga in the early 2000s I began to understand how a housing boom changes the emotional temperature of a place, creating both excitement and at times a sense of unease.

After graduating I moved to the San Francisco Bay Area, first for a brief stint in tech before landing at a large hedge fund in downtown San Francisco. Looking out at sunrises over the Bay Bridge with views of the Ferry Building, I figured my Inland Empire drives along Foothill Boulevard in search of fast food and donuts (shout out to Donut Man) while housing subdivisions sprouted up all around were a distant memory, something that would have no professional value in my new life with a Bloomberg Terminal and spreadsheets.

My job at the firm was risk management, and the pivotal moment for me was when our financials analyst came back from a conference in the summer of 2006 and said the subprime mortgage situation seemed concerning. We didn’t have credit experts at the firm, and I got drafted into helping out. That led to phone calls with Greg Lippmann at Deutsche Bank – the guy who Ryan Gosling’s character in the Big Short was loosely based on – and two years of tracking the subprime deterioration, coming up with housing-related trading ideas, and managing the risks associated with the spillovers into the broader financial system and economy.

Seeing the monthly deterioration in portfolios of mortgages every month in 2007 based in Florida, Nevada, Arizona, and the Inland Empire made it personal to me. On one level they were numbers in a spreadsheet, assets in a portfolio, risks to manage. But on another these were real places I felt a connection to and real people who had been excited to get into a home with a seemingly-attractive monthly payment who had seen their homes surge in value over the past few years, only to watch it all unravel.

Those years were exhilarating but generated a lot of emotional baggage, and by 2010 I was looking for a fresh start. I chose Atlanta because it was closer to my family on the East Coast, I felt like smartphones and the mobile internet would make knowledge jobs easier to find and do outside of the traditional coastal hubs, and of course because housing was much cheaper.

Since moving here I’ve learned that the housing market in Atlanta and other similar Sun Belt hubs function as relief valves when housing in New York and California gets scarce and expensive. Nosebleed rents in Manhattan become an opportunity for apartment developers in Midtown Atlanta.

This journey around the country, formative experience with the mortgage market during its crisis, and years of writing about housing and the economy for Bloomberg Opinion have now led me to launch the Housing Frame. Housing is people, it’s places, it’s feelings, it’s data, and it’s numbers in a spreadsheet – everything matters.

Why the Housing Frame?

Housing data is much easier to find than it used to be. A variety of data is on the FRED website. Lance Lambert of ResiClub, a housing analytics site, has created the ResiClub Terminal, a powerful tool for deep dives into local and regional housing market data. Artificial intelligence over time will likely lead to new ways of getting housing data.

What’s missing are ways of helping people make sense of the data, what it means beyond the narrow scope of any single data report, and how people should think about it as they make economic or housing-related decisions. Any big theme reshaping the economy – artificial intelligence, inflation, supply chain bottlenecks, immigration – usually has a housing market angle. The Housing Frame is about having a broad lens on the economy, finding the housing angle, and identifying what’s noise and what’s signal.

Why subscribe?

Free subscribers will receive:

• A weekly podcast/essay focused on important dynamics or inflection points related to housing

Paid subscribers will receive:

• Weekly subscriber-only analysis with charts and data geared towards industry professionals, investors, and junkies who want to go deeper than the headline numbers

• Rapid reactions to news and events shaping housing — breaking news, unexpected market moves, important tidbits from corporate earnings reports, Federal Reserve policy actions

• Let’s chat! Something I’ve loved about housing over the years is how lowercase-d democratic it is. Whether you’re a real estate agent, mortgage originator, work for a homebuilder, or are a homeowner, and whether you’re in Boise, Buffalo, or Birmingham, you have something to contribute to housing discourse. I’d love this space to become a community for constructive discussion.

I’ve been analyzing and writing about housing for the past 20 years and hope to be doing it for another 20. I’d love to have your support. Thanks!

Conor