Financial Feminist - 162. Will the Housing Market Ever Get Better? with Daryl Fairweather (Redfin Chief Economist)

Episode Date: June 11, 2024

Is the dream of homeownership feeling more like a distant fantasy? Ready to cut through the chaos of today's wild housing market? Tune in to today’s episode as Tori sits down with Redfin's Chief Eco...nomist, Daryl Fairweather, to unlock the secrets of buying smart in 2024. From the effects of the pandemic on housing prices to the critical role of government policy in addressing affordability, this conversation uncovers it all. Daryl also discusses innovative strategies for first-time buyers, the impact of climate change on homeownership, and the surprising trends in migration that are reshaping cities across the US. Whether you're actively looking to buy a home or just want to stay informed about the market, this episode is packed with valuable information that you won't want to miss. Read transcripts, learn more about our guests and sponsors, and get more resources at  Not sure where to start on your financial journey? Take our FREE money personality quiz! Check out Daryl’s upcoming book: Hate the Game: Economic Cheat Codes for Life, Love, and Work Follow Daryl on X Follow Daryl on Instagram Special thanks to our sponsors: Thrive Causemetics Get an exclusive 10% off your first order at Masterclass Get an extra 15% off any annual membership at Squarespace Go to to save 10% off your first website or domain purchase. Hill House Visit and use the discount code TORI at check out for 15% off. Learn more about your ad choices. Visit

Discussion (0)
Starting point is 00:00:00 What is actually beneficial to the people who are going to live in your community long term and what would be best for society as a whole instead of just fear mongering about more people being in an area. We want more people. We want more neighbors, I think is the mentality to have. And if you want to be proactive about it, that could also mean showing up at your city council to say something positive about wanting more housing going in your neighborhood because there are lots of people showing up to complain about housing being developed.
Starting point is 00:00:31 Hi, Financial Feminist. Welcome to the show. I'm excited to have you. For any new listeners, my name is Tori. I run Her First Hand or K, which is a money and career platform for women. I believe I was put on this earth to fight for your financial rights. I am an author as well. I have a New York Times bestselling book called Financial Feminist. It's the same title. And we have a whole bunch of information, both in the backlog of our podcast. We have over 150 episodes that you can go listen to. We talk about everything from Roth IRAs to sex work to managing an inconsistent income
Starting point is 00:01:02 to the mental load and emotional labor. We talk about it all. So, fairly, pretty good, you already knew that. Welcome back. I am in New York right now. I am back in my favorite city in the world. I am seeing friends.
Starting point is 00:01:13 I am going to shows. I am living my best life. I saw Illinois last week, a couple of nights ago. For those of you who don't know, it is based on Sufjan Stevens' very infamous 2005 album. And it is one of the most moving shows I think I've ever seen on Broadway. Oh, what did I say? Sufjan? We can keep it. No, we can keep it. Kristin just told me that. What is it? Sufjan? Oh, I said Sufjan. I was so close. I was a gentle Jay. Sufjan. Sufjan Stevens. I'm so sorry. And as Call Me By Your Name is my favorite movie, I feel like I've committed a Cardinal sin here. Sufjan Stevens. Thank you. It is choreographed and directed by Justin Peck, who did the
Starting point is 00:01:57 choreography for West Side Story, the new one recently directed by Steven Spielberg. It is a dance show show which I did not expect going in and I'm gonna be honest I was sitting there for like the first you know song or two being like oh this is not what I expected nobody is like singing on stage even though they have they have singers and they're incredible but I was just like this is not a real musical this is not what I expected and then they brought out a tap dancer and And I was like, I'm in. I'm in. You've sold me. I was joking with Elias, who is the co-founder of Treasury and
Starting point is 00:02:29 a good friend of mine that, you know, this was how I was feeling. And he was like, yeah, they were backstage like, oh, we got a winner over calling the tap dancer. And somebody else was like, there's no, there's no tap in this show. Well, there is now. So if you're in New York, if you're visiting New York, it is a Tony nominated show. My friend I did theater with growing up actually is a producer on it. It was one of the most beautiful shows I've ever seen. The choreography is incredible. The music's phenomenal. Just go see it. It's a great, great show. They do rush tickets. So you can see it for like less than 50 bucks. I highly recommend it. I just thought it was a beautiful show. As well as I saw Sufs, which was a really cute show about the suffrage movement, very important
Starting point is 00:03:09 show produced by like Hillary Clinton and Malala. And yeah, it was great to see that show. Yeah. And friend of the show, Emily Tish-Thessman, who's been on the show before her sister produces a bunch of works and yeah, is like she's the head producer on that show, which is very cool. And then I got a couple more days here, so I'm probably going to see at least one more show and I'm really excited. So we should do maybe a whole episode on this, but we have a blog post and we can post it down below about how I get cheap Broadway seats. Do not go to TKTS. Like if you're visiting New York, do not do that. You're overpaying and definitely don't go to the box office and pay whatever they're asking for unless it's cabaret because apparently you can't get anything to cabaret that isn't cheap or that isn't expensive. So no, I've seen literally at this point,
Starting point is 00:03:54 my mom bought me I think for like Christmas a year ago, one of the like big binders where you put all the playbills. I'm done. I'm out of sleeves. I've already seen too many shows and I've never paid full price for a ticket. So yeah, rush shows, lottery, enter lotteries. There's a whole, I'll give you the whole spiel on how to do it in the blog post. Today's episode, Daryl Ferrell-Weather is our guest today. She is the chief economist at Redfin. Her insights have been featured on 60 Minutes, CBS Evening News, as well as in the New York Times and Washington Post. Prior to joining Redfin, she was the senior economist at Amazon working on problems related to employee engagement and managing a team of analysts. During the housing crisis,
Starting point is 00:04:38 Darryl worked as a researcher at the Boston Fed studying why homeowners entered foreclosure. Darryl received her bachelor's of science at the Massachusetts Institute of Technology, no big deal, and received her PhD and master's degrees in economics at the University of Chicago, where she specialized in behavioral economics. So today we're talking about the current state of the housing market and how we got here. And let me tell you, it's not great. And if you've ever thought about buying a house, what the future of the housing market looks like if you're someone who is actively looking,
Starting point is 00:05:07 someone who is considering, can I even consider buying a home because they're so expensive? We're talking about that. And really fascinating, we're discussing the factors that go into creating affordable housing and why building more housing is only the start of that solution.
Starting point is 00:05:23 So without further ado, let's go ahead and get into it. But first a word from our sponsors. If you're that person who is just trying to survive the summer heat and girl same, because I don't do well in heat Hill House Home has got you covered. They invented the viral nap dress, which has the most flattering and comfortable fit with their signature smocking, and their dresses are easy and versatile. Hill House Home makes fun fashion that makes you feel good, and celebrities like Taylor Swift and Olivia Rodrigo have been spotted in Hill House dresses. You can wear the same dress whether you're running errands or whether you're going to a wedding that evening. You can go to and use discount code TORI at checkout
Starting point is 00:06:05 for 15% off your purchase. With Ancestry, putting together your family story is made easy. Using an intuitive family tree builder, you could discover and preserve new details, photos, and stories about your ancestors. Uncover new relatives and branches of the family with automated ancestry hints.
Starting point is 00:06:25 Connect the dots with access to millions of historical documents. And then share what you find in one central place. Visit and start discovering your family story today. I came out here during the pandemic. It was one of those remote work situations and I never returned. Yep. Where'd you move from? California, New York, one of those? Seattle. Oh, were you really Seattle? Seattle is where Redfin is headquartered. Yeah. That's where I'm at right now. Oh, okay. Yeah, I was living in West Seattle. Yeah, cool. Lived there for a little bit. I did like the Airbnb hopping for a while. And yeah, I forget Redfin's located
Starting point is 00:07:17 here in Seattle. Of course you were here. Cool. We're really happy to have you. You got your bachelor's of science from MIT and your PhD and master's degrees in econ at the University of Chicago, no big deal. What drew you to economics in the first place? And can you also break down what behavioral economics is and what that means? Sure. So I was always interested in math growing up, I went to MIT thinking I was going to be an engineer, but I also was always interested in people. And then I learned that economics is this combination of math and social
Starting point is 00:07:51 science, trying to understand people. Like when I first heard about economics, I thought, you know, it's about the stock market, or it's about finance, but really it's about why people make the decisions that they do, what incentives are at play, and it uses prices, whether those are actual sticker prices or shadow prices that are hidden to explain why people make a certain decision. So I like that frame of thinking and I started off on it at MIT and then couldn't get enough so went and got a PhD. But do you have any like interesting anecdotes or like examples of economic indicators? I'm thinking like the lipstick indicator.
Starting point is 00:08:31 Well, I think that one thing to understand about what's going on in the economy is that everything that we look at is a reflection of something that's happened in the past. Like most indicators are lagging indicators. So when we talk about something like the unemployment rate, it's really about what happened, you know, three months ago than about what's happening right now. So everyone's always looking for forward looking indicators. One of the ones that we use at Redfin is search activity on Redfin. So we can see if somebody is, say, living in Seattle, but they're searching for a home in Las Vegas,
Starting point is 00:09:05 that's an early indication that they're going to buy a home and potentially move from Seattle to Las Vegas, which would have all kinds of economic impacts if that was a larger trend. So I like looking at things like search behavior as an indicator. Yeah, it's really interesting. And I feel like that's the most intimate I think we ever are is with Google. We're the most intimate vulnerable versions we ever are is with Google. We're the most intimate vulnerable versions of ourselves with our search engines. Yeah, I Google has even more information. I just know what homes people are looking
Starting point is 00:09:33 at. But yeah, Google has even more. Yeah, they have more information about every illness I think I've ever had in my entire life. Yeah, can you give us the really quick overview on the current climate of the housing market and how we got here? The housing market is basically, I would say, in a deep freeze and it starts with the pandemic. So during the pandemic, there was this short and sharp recession that happened where everybody thought the economy was going to come to a halt. So money was pumped out into the economy
Starting point is 00:10:06 and interest rates were set at essentially zero, which made it really cheap to borrow to buy a home. And anybody who could buy a home was buying a home, but the people who could buy a home during a pandemic were people who are already pretty well off. They were buying second homes or investment properties. So there was all this demand, prices shot up, and now more recently
Starting point is 00:10:26 interest rates have gone up and prices are still high. So we're just left in a situation where housing is really unaffordable and anybody who bought a home already is fine. They don't need to move and they wouldn't be able to afford to move given higher interest rates anyway. So it's created this really stark inequality between people who already own homes and people who haven't been able to buy a home yet. And if you heard like some noise in the background, that's my son who just got home from school, I guess. So let me know. No, we're so good. You mentioned like the you know, the search
Starting point is 00:10:58 trends on Redfin. Are there any trends you're noticing with the housing market that you know, Redfin helps you helps you realize? Well, one thing we've noticed recently is an increasing share of all cash buyers. It used to be that they represented like one in five purchases and now it's close to one in three. And that's again, just showing the inequality in the housing market that these high interest rates are really a burden for first time home buyers, people who don't have cash on hand, they can't afford to borrow. But if you already have cash because you have
Starting point is 00:11:29 a huge stock market portfolio or something else like that, then you can still buy a home and not really feel the pain of what everyone else is feeling. Right. Well, and you know, to put it in layman terms for listeners, right, if you're somebody who's selling a house, you're more likely to take the all cash offer than you are to agree to somebody who's taking out a mortgage, which is typically your average person. So it makes this massive, yeah, inequality even in terms of searching for houses or obtaining the house that you want if somebody swoops in and is able to offer, you know, a million dollars all in cash. Yeah, that's absolutely right. We did a study on how much cash offers matter. A couple years ago, we found that a cash offer is 50% more likely to be accepted than the same offer,
Starting point is 00:12:15 but that's financed. So it does present a big, a big advantage if you have cash. Well, and as someone who used to live in Seattle, and for me, somebody who still lives here, I think there is, I don't know if it's an actual thing or there's just this like rumor that like a bunch of people from China or like Chinese companies are like swooping into Seattle and like purchasing properties in all cash. Is that true? Is there a version of that in various cities in the US where like these corporations or these people who have, you know, tons of money are just swooping in and buying up everything?
Starting point is 00:12:45 There's not great data on it. There's no database that says what country people are from when they're buying a home. But I remember here, I've been at Retro for five years and for a time there was a lot of anecdotes from agents about Chinese buyers being pretty dominant in the housing market, especially in the luxury space. But then that's died down largely due to the economic situation in China and how they have kind of clamped down on flows of money leaving the country. So I think that might have been more true pre-pandemic than it is now. Yeah, well, maybe a version of that we can talk about is like hedge funds investing in real estate across the country. So they're coming in, you know, purchasing property and
Starting point is 00:13:29 then hiking rents in communities, which displacing low income people who have by and large been the primary inhabitants of these communities. So what role have you noticed hedge funds and major institutions taking in diminishing the existing affordable housing stock? And is there anything we can do to combat this? Well, so yeah, lots of thoughts about that. So I think the biggest difference between a hedge fund investor in real estate and say like a mom and pop investor in real estate is that the hedge fund is going to be very on top of current trends in rents and, you know, be better researched about like what they could charge.
Starting point is 00:14:09 So when they go and buy a bunch of properties, it's because they think that they can make a profit on it and they're probably accurate about it and about how much they can increase rent to make the money work. But the problem with mom and pop landlords is that it's harder to hold them accountable sometimes. If you have a problem with your mom and pop landlord and you think that they're possibly discriminating against you
Starting point is 00:14:35 because of your race or your gender, there's not a lot of recourse because there's not a pattern if it's just a one-off situation. So I't know if necessarily like it matters whether your landlord is a mom and pop or a large investor, like if that creates a better experience for you as a renter. But I think what's more concerning is the rising rents, like how are they able to get away with charging so much in rent? And the reason they're able to get away with charging so much is because there's fundamentally a lack of supply. There's a scarcity of housing, which is a real problem considering housing is a basic necessity. Like it shouldn't be something that is scarce, that is speculated on, that increases in price every single year, year after year.
Starting point is 00:15:18 We should be just building more so that the price can stay low so that supply can meet demand without having this kind of price hiking. Yeah. Well, and you said before, and I've experienced this, and I think we all have, is that medium home prices have skyrocketed, but then of course interest rates have too. So yeah, I mean, I remember in the pandemic with Seattle just how quickly the housing prices were increasing, but interest rates were relatively affordable. And now it seems like, okay, we still have really high costs. But also interest rates are six, seven, potentially even 8%. Is this going to cool down? Can we predict that? I think myself maybe and a lot of people are waiting for the dip, but the dip has not come. Right. And see, I mean, Seattle had a bit of a correction when interest rates went up,
Starting point is 00:16:04 but then, you know, prices came down maybe like 3% and then just started going right back up again. So any kind of improvement in affordability is short-lived because of that fundamental lack of supply. There are more people who want to live in Seattle than there are homes available in Seattle. And that's the thing that the city really has to grapple with. They've made some progress in terms of allowing for more housing to be built. So building ADUs on a single-family lot. It might be as small as a studio apartment in the backyard, but some of them are pretty big, like being two stories and two bedrooms, like pretty comparable to, you know, a typical home. So I think the more that that kind of development gets built, there may be more affordable entry points for people to get into the housing market. Because the single
Starting point is 00:16:49 family homes in Seattle, you're not going to find one for under $800,000. And even the $800,000 ones are going to be teeny tiny if they're close to the city and close to transit and all of that. But the more small home starter homes that we can build, that gives people the opportunity to get in on the housing ladder and have something to call their own instead of having this massive gap between, you know, affording an apartment that's probably too small and being able to buy that home that you've always dreamed of. Yeah. What do you say to people? And I'm really asking for myself here who are waiting for that dip. I don't think we can
Starting point is 00:17:25 protect it, right? It's probably like the stock market. Trying to time the stock market is really difficult. Is there a correction coming? I would not bet on a correction in the sense that the home that is currently selling for $800,000, I don't think it's going to sell for less than that in the future. I think what maybe is more realistic to hope for is that more housing gets built that is like, you know, condos and townhomes and provides a more affordable entry point that would allow somebody to get into the housing market and start to build equity to level up. But yeah, I don't think that single family homes in Seattle are going to become more affordable, not in the next five years. You know, if you go farther out, then you know, who knows what's going to happen. But I just wouldn't bet on it in the next five years. Nicole Zick That is that relevant for other US cities as well? Are we seeing that similar trend of like, if it's a $500,000 home, it's
Starting point is 00:18:20 probably going to be $5,000 plus for the foreseeable future? Well, the only place that's seeing a decline in prices was Sarasota, Florida. And that was after many years of price increases. Yeah. There was also a very modest decline in San Antonio. But like, the Sarasota was the only one that stood out like, Oh, this is substantial price decline. I think it was around 4% from last year. But that was after many years of price increases. So if you, you know, we're thinking about buying a home in Sarasota in 2022, it's still more expensive now than it was in 2022. It's just slightly cheaper than it was in
Starting point is 00:18:58 2023. So that's what I mean, like holding out is not going to be a winning strategy. Because if you hold out for one year and price is up 5%, and you hold up for another year price is up another 5%. And then the third year prices go down, let's say, 4%, you're still would have been better off buying earlier. But at the same time, a lot of people just can't afford that home given how high mortgage rates are. So I don't think I think for most people, it's not really a matter of timing the housing market. It's more about like, being accessibility. like, being accessibility. Yeah, being, being realistic about what you can afford and finding the best solution given the current options.
Starting point is 00:19:33 I will say you were talking directly at me as I was doing the like, you know, the prices will come down. Like I was talking, talking that shit about four years ago, and they have not come down. So I think at least I needed to hear that. But yes, I mean, we can't go through this episode and not acknowledge and we talk about on this show a lot that home ownership is not a given now. It is a privilege. It is something that most people cannot afford. And, you know, with rising housing costs for many people, it's actually cheaper to rent even as rents are
Starting point is 00:20:05 skyrocketing. We know this, you know, the change needs to come from the policy level, it's not so much individual people's choices. It's just things are getting more expensive. I don't know your thoughts on that anything to add there? Yeah, well, I think that there's a huge role for government to play, because government has been dropping the ball for the last 15 years or so, and not promoting housing affordability. They've been paying lip service to it by doing things like downpayment assistance, which is great if you qualify for it, but doesn't really do anything to solve the long term supply shortage. So I think the government needs to be more strict
Starting point is 00:20:40 with the single family neighborhoods that have been so resistant to building housing, blocking things like affordable housing units or apartment buildings because it changes the character of the single-family neighborhood. But we need to remember that a place like Seattle or any major metropolitan area, we should be allowing as many people as possible to live in those areas so they have access to the jobs
Starting point is 00:21:03 and the services and everything that those cities have to offer. So it really doesn't make sense to have exclusively single-family neighborhoods. Those can go in the suburbs. The city needs to densify so that people have access to transit and medical services, jobs, all the things that cities can offer instead of it being something that you have to pay so much money to buy into to have access to. Right. I mean, New York has a housing shortage very infamously. But you know, when you think about just the way the city is planned in New York, no one's got a single family standalone house with a yard in New York City. And there's got to be a reason for that. So yeah, I think that's that's a great example.
Starting point is 00:21:41 You've mentioned a couple times, and we found a Forbes article where you were quoted saying, we can make housing affordable and eradicate bad actors by increasing the supply of homes. So what does this look like in that hyper local sense, but also in, you know, grander policy, you were mentioning, of course, the government needs to do more to support. Does it start with city planning? Does it start with, you know, again, we have a land shortage in many places too. So like, where do we have to start to even think about getting more housing? Well, if you see something at the local level on the ballot that's about housing development, vote for the housing. I think that there's a lot of, you know, naysayers saying things like, you know, there's going to be not enough parking, going to increase traffic, there's gonna be not enough parking, gonna increase traffic,
Starting point is 00:22:25 there's gonna be too many kids in the schools, doing all the spear-mongering around housing to convince people to not vote for those housing units. And then without the housing going in, anybody who's an existing homeowner gets the benefit that their housing is still rare and goes up in value. So I think be skeptical of those arguments, think about what
Starting point is 00:22:45 is actually beneficial to the people who are going to live in your community long term and what would be best for society as a whole instead of just fear mongering about more people being in an area. We want more people, we want more neighbors, I think is the mentality to have. And like if you want to be proactive about it, that could also mean showing up at your city council to say something positive about wanting more housing going in your neighborhood, because there are lots of people showing up to complain about your housing being developed.
Starting point is 00:23:14 Yeah. I mean, I feel like that links to a lot of the sense of individualism in America, too, of, you know, this is the land that I bought, and I worked hard for it. And I want my peace and quiet. And I think, yeah, it's a larger conversation about the psychology of all of that too, and the socialization of Americans. Right. And I think resistance to progress because like, I don't know why people buy into a neighbor thinking it's never going to change. Change is the only constant. Yeah, try to resist it. It's just going to lead to even more problems. But yeah, I can go on a whole rant about that.
Starting point is 00:23:46 I mean, we have the time if you'd like to, but we'll just keep moving. That's half of what I do on this show is rant. So as you might know, I am going to a wedding in Italy this summer. It is in the Omafi coast. It is going to be hot. It is going to be like 90 degrees. I have to wear pastels. I don't own pastels. And curvy girl. So a little hard to fit. So when Hill House reached out to us about sponsoring the podcast, I was like, yes, yes, yes, yes. Because Hill House Home invented the viral nap dress. And you're thinking nap dress, but the nap dress for the wedding. Oh, it's like flattering and it's comfortable and they've got like their signature little smocking fit. It's so great.
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Starting point is 00:25:54 a free trial and when you're ready to launch, go to slash FF pod to save 10% off your first purchase of a website or domain. You've had some articles talking about how do we think about home buying in this new era? So if somebody does want to buy in the next few years, how do we get them in a place where they can even think about that? Right. But also what are the steps that you need to take to actually make that happen? I mean, I think the first step is to do some financial planning in a broader sense and think about like what is important to you when it comes to home ownership. Even if you
Starting point is 00:26:32 are at a place where you're not earning enough money to own a home in your dream neighborhood, if owning a home is something that's important to you, you might want to consider just more geographic areas. There are places in the country still where you can get a cheap home. So I think expanding your mind in terms of the geography can be a way to get into the housing market sooner. But also another way to get into the housing market, I think, to think about it more big picture is to think about like, well, how much money would you need to earn to be able to afford that house that you want? Even accounting for how that home might go up in value. And then like, well, what do you need to accomplish in your career to get to the point where you're making that much money? And then being actually like realistic, well, if you were making that
Starting point is 00:27:11 much money, would you even still want that home? Or is that the point where you decide like, I don't need to live in the city anymore, I can actually move somewhere much more affordable because I'm at this point in my career. So I think people can get really down on themselves because they can't afford a home, like the home that they wanted at this very moment in their life. But I think if people start to expand their mind in terms of like, where they would want to live or at what point home ownership would make sense for them or what's more important to them living somewhere where they can earn a really high wage versus living somewhere where they
Starting point is 00:27:43 could have a really affordable home, thinking about that more big picture might help people feel more certain with what they're deciding. Yeah, I've done many, many episodes on this show of like, I'm infamously a multimillionaire who rents and like, I've talked about that, like, homeownership is not just about, you know, the financial choice, or if it makes sense financially, it's also about like, does that align with where you're at in your life and what you actually want? Yeah, I think, again, I keep picking on Seattle, but like the only home I could afford for a long time was in Tacoma or was in Auburn, which is an hour outside of Seattle. And like, you know, I, when I
Starting point is 00:28:18 was in my twenties, that was not the vibe I wanted. I didn't want to like visit my parents every weekend. And so yeah, it's not just about your financial choices. It's also about, you know, how is this going to affect your friendships and your social life and like, where you want to be. And I don't think I would have started my business had I not lived in the city where there was networking events and where there was other people doing similar things to inspire me. And so there's just a lot more that goes into the home buying
Starting point is 00:28:43 process and like determining whether you or not you want to be a homeowner, then does the math make sense? Or can I make the math work? Yeah, absolutely. I agree with that. One of the biggest things is just like, do you actually expect to be in the same place for the next five years? If you want to be open to a new job in a new city, or I don't know, moving in with a partner in a new city or whatever it may be like you probably aren't ready to buy a home because usually the math only works out for it to be financially beneficial if you are going to stay in the same place for five years. So I think that's the first question is just do you even want to lay down roots
Starting point is 00:29:18 in that way at this moment? If you're a first time home buyer, can you walk us through some of those programs that someone could take advantage of? It's very localized. So the first thing I would do is look up whatever city are in down payment assistance or whatever state you're in down payment assistance. Biden has a plan to increase down payment assistance. So if you're deciding whether to vote for him, you might want to look at his plan. That would be more at the federal level. There are also programs that banks have. So whatever lender you're going with, ask them if they know of any credits that you can apply to. But it's definitely a mosaic. So it's not like a one thing I can point people to for looking into that assistance. Nicole Sarris But I think the answer, yeah, for any listener is like there is assistance. It's just going to depend on your, yeah,
Starting point is 00:30:03 dependent on where you live. And I think that that is a way for you to get in if you've thought, oh, this is hopeless and it will never happen for me. I think there are potentially some programs out there. And it's just about like learning what's available to you and getting that education, I think. Yeah, I have a friend who was like a veteran and like there's a huge, you know, there's a military or veterans program that can make home ownership way more affordable. So there's, there's a lot of different things out there. Yeah. Another one is FHA, the fair housing authority. They have a program for first time
Starting point is 00:30:34 home buyers. I have a friend to use it to buy a fixer upper, and then they were able to even get money to put into the house. If you get creative and you can do some legwork on what you qualify for, there could be a lot of money on the table that could assist you. Yeah. You mentioned something that we encounter a lot in our community, and I think is actually the number one thing financially that holds people back is this attachment of like, if I haven't met X goal, by certain age, I feel like I have failed.
Starting point is 00:31:05 Like we very much associate like our net worth with our self worth. And if we are not as financially well off as we think we should be, it's very easy to feel like a failure. And I think especially with home ownership and especially in America, there is just like this idea of like,
Starting point is 00:31:23 you're not an adult unless you own a house or like you haven't made it unless you're a homeowner. But for most people right now, that's completely out of reach. So can we maybe talk about like a bit of the psychology or a bit of the emotional stuff that's going on when you are trying to purchase a home but you're thinking to yourself, gosh, I don't think I can afford this. Have I failed? I'm such a failure. Right. I mean, that's a very deep thing to unpack. I think what is kind of at the heart of what you're getting at is people expecting to meet these external markers of what success is. And I would encourage people to look internally and think more about what they actually value and whether they're hitting the things that are important for them. I think the dream of homeownership is a very
Starting point is 00:32:11 American dream and something that most likely is coming from societal pressure or family pressure. So I think kind of dividing that pressure or acknowledging it and then thinking about like, well, are you hitting the other goals in your life that you set for you? And if you really had to choose between like, say, I know, being a homeowner or accomplishing whatever other thing that you are prioritizing in your life, like which one which one is more important to you. And I think usually people will find
Starting point is 00:32:36 that the reason they haven't bought a home yet is because it's actually not that important to them yet. Or at least not important enough to spend as much money as it costs, which is the reality. It's not like you live in the world that your parents lived in where homes were lower priced. I mean, they had different challenges, obviously, but home prices have gotten really expensive in major metropolitan areas, which is a real barrier if you're trying to, you know, advance your career in one of those major metropolitan areas, you don't really have much of a choice of where to live. And things have gotten so competitive too. I just feel like you have to make a decision
Starting point is 00:33:10 really quickly and you're going over asking to get the house that you want. And it's just kind of that nightmare. I mean, from, you know, I'm asking an economist a very psychological question, but I also want to I'm a behavioral economist. So that's what I specialize in. Sure. Okay, sorry. Thank you. No, yeah. That's I think that any reassurance that we can offer people that like it is financially difficult to buy a house like it is just hard. And so I do I don't feel like it is you know, you're not do it's not that you're not doing enough.
Starting point is 00:33:37 It's not that you haven't made the right choices. This is why the policy has to come into support just because things are so expensive. It's very inaccessible right now for the average person. Yeah, that's absolutely true. And it's, I think if you look at the stats, depending on where you live, it's outrageously expensive to own a home. If you're in Seattle, or the Bay Area, or Los Angeles, or DC, or Boston, New York, like in the
Starting point is 00:34:01 normal people will be able to afford a home, you have to be really exceptional, come from wealth, be a super high earner, to, in your 30s or 20s or whatever old these people are, to, like, expect to own a home. And then I think if you're older, then you probably have a bit, I think, more perspective about there are other options out there for you besides those, like, owning a home, you know what I mean? But I think that kind of wisdom might come with age and realizing that you don't like need to own a home to necessarily be financially successful. When you're in your 20s and 30s, it feels like this goalpost that you have to hit amongst a lot of other goalposts.
Starting point is 00:34:36 You mentioned in a Forbes article you wrote about kind of like some ways to buy a first home and one of the ones that I loved was like this teaming up strategy, which is like, okay, team up with somebody else who also has an income and buy the home together. So can we talk a little bit about that creative option? Yeah, I think that that is a great option, especially because zoning laws are changing, it could end up being a very like savvy option. So you could team up with anybody to buy a home. You don't necessarily need to be married. You just need to both sign on the mortgage or sign on the deed. If you're going to do that, I would recommend treating it like a landlord-renter relationship where
Starting point is 00:35:13 you both are landlords and you both are renters. So, you know, dictating the terms of how long it's going to last and what do you do if somebody wants to break the lease or move out and how that is resolved. Definitely have that all laid out. But I think it could present a lot of opportunities because in a place like Seattle, for example, you can build an ADU on your property, same in California. So you might buy a single family home, that's only one unit right now, but then split it and then build another house in the same property and kind of be part of the solution for building more housing. I think that could really be an exciting avenue for people. And I will offer another version of this. I've had multiple friends who are two couples and
Starting point is 00:35:53 they will buy a house together and one couple will live in the top floor or it's a duplex and one couple will live in the side. I have multiple friends in Seattle who have that. Yeah, that's awesome. Who like one lives on the top floor, one lives on the bottom floor, and it's split four ways. It's not even two ways. It's four ways that way because you have two couples. So yeah, I've seen that work really, really well for my friends. I want to echo what you said though. Get your contracts in place. Do not do this. It's just like, it's a vibe. No, it's a legal binding agreement. You need a plan if somebody wants to get out. You need a plan if somebody doesn't pay their share. It's just like having roommates and any other scenario.
Starting point is 00:36:27 So yeah, make sure that you have a legally binding contract if you're going to do that. Absolutely. I want to get into the not in my backyard debate. It's obvious that we need housing stock. How can we guarantee that certain segments of this housing stock are affordable? And how do we overcome this not in my backyard subculture that aims to prevent it? I mean, that's a, it's a very big question again, because I think the not in my backyard
Starting point is 00:36:53 mentality, it's, it comes from this like scarcity mindset of if I have something, then somebody else gets it, then like somehow what I have is less valuable, which is just a bad mindset to operate from. It also puts the self above the community or above the future community, which again is just bad. I feel like solving the NIMBYism problem is akin to solving a lot of our other political problems. If we could all get together and get on the same page about building more housing, then we'd probably be able to do it for like reducing our reliance on fossil fuels and all these other big problems that really just require us working at our own best interests instead of against our collective best interests. So that's like a very philosophical answer. I can get more precise if you want me to.
Starting point is 00:37:41 That's no, but that's that's what we keep coming back to on this show too, is it's, you know, let's just talk about personal finance when it comes to personal finance, there's 20% that you can control and there's 80% of the things that are racism and sexism and ableism and homophobia and the trillion dollar student debt crisis and stagnating minimum wages and everything else. So it yeah, homeownership and all of this of like, yeah, this like this is my house and my land and my property and I don't want my communities to change is, yeah, there's a lot of issues at play here that have actually very little to do with like how much, yeah, can a individual person make an impact? But I think to echo your point is it's like this collective mindset
Starting point is 00:38:21 is something that we're typically not told as Americans or taught as Americans, this focus on community. And I think it can be a really, really great answer to all of that. Absolutely. So even for me as someone who doesn't own property, I think I still have done a pretty good job of like building wealth. And I think, again, for the average person, they might be thinking to themselves, either I can't afford that home or I just don't want to be a homeowner. Like you were saying, it doesn't appeal to people, I think, in the same way. What other ways are there
Starting point is 00:38:48 to build wealth to feel financially stable, where your net worth doesn't revolve around property or purchasing a home? So I don't believe that owning a home is the only way to build wealth. There are many other good ways. So what I would advise people to do is to as you rent, set aside an additional portion of your income, whatever you feel comfortable with, say 10% or something like that, and put it into an investment account, like index funds are diversified, which is good because that makes them less risky, they just track the entire stock market. If you're more ethically conscious about what you invest in, there are these ESG funds that stand for environment,
Starting point is 00:39:28 social and governance, that are also index funds and well diversified. So that could be something else to look into. But the basic idea is putting your money into something that's gonna grow. And the stock market tends to grow and value faster than housing. There's no maintenance.
Starting point is 00:39:44 You don't have to like take care of your property the way you do at the house. So you just let it grow. But you just have to be disciplined about investing on a regular basis and not getting caught up in like, the stock of the day, just being really safe about it. it. Yeah, the speculative investments, the crypto and everything else is not the strategy we're supporting here. You also wrote an article about how climate is affecting home buying, which I find really fascinating. Can we talk about that as well as the things, you know, the additional expenses people have to consider if they're, you know, moving to an area where climate their climate is rapidly changing? Yeah, so one thing to consider if you're ever gonna buy a home is how the climate around that home is going to change. We're seeing increasing wildfire risk in the West,
Starting point is 00:40:33 increasing flood risk in places that are on the coasts or near rivers, and increased storm risk, and all of that poses physical risk to the home and the people who live in there. It also means rising insurance costs, potentially rising property taxes, maintenance costs. So it's all just something that I think homeowners are going to have to deal with and pay for. Like a lot of the costs of climate change are going to show up as housing costs when insurance rates rise or property taxes go up or these other expenses increase.
Starting point is 00:41:06 We're already seeing that people in California are being denied from insurance and insurers are leaving that state because they can't make a profit. And then Florida rising insurance costs because of increased storm risk among other factors. So it's already showing up the cost of climate change. And I think that's just going to become more obvious. We did some research at Redfin when we launched flood risk on the website. So if you go on Redfin, and you look at any home, you can see climate risk factors provided by First Street. They have storm risk, flood risk, as well as some other climate risks. And when we
Starting point is 00:41:40 launched flood, we found that the people who were shown flood risk in this randomized experiment went on to buy homes with half as much risk. So if they're looking at like a severely risky home, they ended up buying a home with only moderate risk. So I think it's encouraging at least that when people have this information, they do act on it and try to make more informed decisions. But in general, people are leaving places with low risk, like the Midwest or some of these expensive cities on the coast and moving to places with higher risk, like in Florida and
Starting point is 00:42:09 Texas. So that is concerning for the sustainability of housing. Yeah. I mean, my brain as a business owner immediately goes, well, they're moving because of tax breaks. Or they're moving because of the cost of living. Or the weather. Right. That's the other thing. Working together on a team with some pretty big personalities is another.
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Starting point is 00:43:14 From now until June 30th, every Miele dishwasher purchased supports the planting and preservation of Canadian forests through the Miele Forest Initiative. Join us in making an impact today for a better tomorrow. Visit to learn more. I am thinking about this phenomenon that largely happened in the pandemic. And again, because I live in Seattle, I'll pick on Seattle. A lot of people left Seattle during the pandemic and moved to Boise, they moved to Montana, and then everybody in Boise
Starting point is 00:43:49 got really mad because they're like, you're driving up our home costs, you're driving up the rent, you're driving up the cost of everything. So I do think there is this trend, you know, New York had the same thing, people were getting out of New York, people were leaving LA, people were leaving Miami and moving to these more affordable, you know, like neighboring cities. But then it was driving up the cost of those neighboring cities. So have we seen that trend backed up in like the data other than just me and a totally and then
Starting point is 00:44:15 what, like, what other examples are we seeing of, okay, it's too expensive here. So we're going over here, but this place is more expensive now. Your anecdotes are spot on. That's exactly what we saw in our data that people were leaving Seattle, Los Angeles, San Francisco, New York, Boston, and going to more affordable places like Boise, Austin, Florida, Arizona, the Sunbelt in general, Las Vegas, places that had the most The Sunbelt in general, Las Vegas, places that had the most stark increase in people moving in, like Boise and Austin, prices got out of control expensive. There were stories of 20 people bidding on the same home, paying hundreds of thousands
Starting point is 00:44:56 of dollars over asking the price and coming out of pocket with cash to make it work because the banks wouldn't even cover the loan how much they were paying. But that stopped when, I mean, that stopped when prices got so high, there was a price correction. And then when interest rates went up, like it really started to cool down. But that means that Austin and Boise aren't the hot migration destinations anymore, because they're too expensive to be that. And it means like, Spokane is more popular or Dallas or San Antonio becomes the next place that people move. So it really does just cascade down to like the more next most affordable place, which is how the housing problems of say California end up spreading everywhere. Because the only the reason that Seattle got so expensive was
Starting point is 00:45:42 because people thought San Francisco got too expensive and they left Seattle. They left San Francisco for Seattle and then you know, it keeps going. So yeah, this is just this is how affordability works geographically. Yeah. So you might not know the answer to this question, we can cut it. But like, is the answer more cities? Is the answer? Obviously, we know the answer is more housing, right? We've determined that, but like, I just feel like you get to a point where it either, you know, is a monster eating itself
Starting point is 00:46:12 where we're back to Seattle eventually, or we just run out of cities to like hop people to. I don't think it's more cities in the sense that like, we need to be inventing cities from the ground up. I know there are Silicon Valley billionaires working on something like that, but- Literally, I remember hearing about that. Yeah, but in general, it's more cost effective to do infill housing. So if there are vacant lots in a city, fill those in with
Starting point is 00:46:34 housing, if there's like abandoned strip malls, change those to housing, you know, there's been an office to housing conversions are a bit difficult, wherever you can like fit in the housing, do that first. And then the next step is to improve transit. So for a city like Seattle, that might mean making the transit between Seattle and Tacoma more regular, more reliable, all that, so that people can move into Tacoma,
Starting point is 00:46:59 but still access all of Seattle has to offer. And I think that's true of most cities, increasing transit and infill housing is the way out as opposed to brand new cities. Yeah. And again, this all comes down to policy because what we're seeing in Seattle is yeah, they're building a light rail, but it's taking 15 years, and it's way over budget and they should have been doing it decades ago. So
Starting point is 00:47:21 that's a whole nother issues like why things are so expensive to build right nowadays. It's right. It's ridiculous. Any fun facts about the current market or like interesting stats? Has there been a surprising city with this huge influx of new buyers? Any other interesting things that the average person would not know? Like, you know, your fact about Lake Sarasota being the only price that are the only city where the price has dropped, anything like that. Yes. So San Diego for the first time became more expensive than Los Angeles to buy a home in. I think that was like because of the pandemic and the way it's changed people's preferences. I used to live in San Diego. It does have better beaches
Starting point is 00:48:00 and, you know, less traffic than LA. And I think people recognize that. And that's why San Diego is now more expensive than LA. So yeah, another one is that Nashville became more expensive than Austin, which I think is pretty surprising because Austin was this huge migration destination during the pandemic. It had this huge boom, but a ton of housing got built in Austin because of this housing boom.
Starting point is 00:48:22 And because of all the new housing coming online, prices corrected and came back down, which kind of proves the point of the way to solve housing affordability is to actually build more housing. Nashville, you know, it had some housing being built, but not as much as Austin, which is why prices are now higher in Nashville than in Austin. Kristin, our podcast producer is listening and is from
Starting point is 00:48:43 Nashville. And she literally just put in the chat. She goes cries in Nashville. Yeah. It's, and it's so funny. I feel like, yeah, even that's the perfect example where I've like, what was the hot city and it's typically like where the tech companies start. And yeah, to your point of like, okay, San Francisco became too expensive. Then it was like Seattle and maybe Portland.
Starting point is 00:49:00 And now, you know, then it was Austin and now it's Nashville. And so it's, you know, what city's coming next. It is like people end up popping around the, it's like the trends differ because of where the jobs are and how expensive it is. And yeah, it's just so interesting to me how all this works. Me too. Never. There's always stuff to study in the housing market. Unpack. Yeah. As we wrap up anything else we need to know about the housing market now or in the future that we didn't cover or that you think somebody should know. One interesting thing that we're following is how housing affordability is impacting
Starting point is 00:49:37 the election. We did a survey of homeowners and renters and half of people said that housing affordability is impacting who they plan to vote for in the election. It's interesting because, you know, Biden's been president for the last four years. I think he hasn't really done a ton on housing thus far. So people might end up blaming him in part for the lack of affordable housing
Starting point is 00:50:01 and also just the state of the economy in general. And the economy is doing pretty well except for housing. So I think housing is like the thing that people are feeling he has fallen short on. He's come out with a plan to address the housing affordability crisis. So at least he's being proactive about it. So maybe that'll work towards his advantage. I've looked at what Trump has said about housing and it's mainly just critiquing Biden for bringing apartment buildings into the suburbs. And you know, a lot of just naysaying on housing development in general. So that's not that I mean, that's, he just didn't seem like he has a lot to say. So it'll
Starting point is 00:50:38 be interesting to see like how people interpret Biden's housing position if they see it as a shortcoming or as an opportunity for him. Yeah. Well, that's hard. We've talked with other guests on the show and I've done so much research around this where the economy on paper is actually not that bad, but the sentiment around the economy is terrible. And I feel like that is very unique, especially with this election, because most people who are incumbents get to go, Hey, look at the last four years of what I've done, you should vote for me
Starting point is 00:51:09 again. And on paper, at least with the economy, the stats are all right, but the sentiment isn't great. And I think that it's going to be very, very interesting as we move into the election cycle about how that affects everything. Yeah, I think that does come back to what we're talking about how it's hard for people to feel like they are financial success if they aren't a homeowner because of the American dream and what the home ownership means in this country, which I think is why there's this disconnect that the economy is so great, except I can't afford a home. Therefore,
Starting point is 00:51:38 the economy is not great, which I think is valid. Yep, totally. This was so fascinating. Thank you for your time. Where can people find out more about you more about your work? Plug away. I mean, all the social media at fair weather PhD is my handle. I also have a book coming out hate the game. So you can look up hate the game book and go to my website there. And yeah, I'm out there. Just look me up. Cool. I'm about to go on Redfin and look at all the houses that I would love to afford. I can't that's gonna be my fun little activity for the day. Everyone's very past time. Thank you so much.
Starting point is 00:52:13 Thanks. Thank you so much to Daryl for joining us. You can follow her on Instagram at fairweather PhD. And you can also check out her book, hate the game, economic cheat codes for life, love and work, which comes out in April of 2025 at hate the game As always, financial feminists, thank you for being here. Thank you for listening to the show. You can subscribe if you want more episodes and never want to miss one. You can also leave us a review, especially if you really like the show. If you don't like the show, stop listening.
Starting point is 00:52:42 If you like the show, leave us a review. And we have a voicemail box down below where you can call in and get advice, guidance from me on our Ask Tori episodes. So thanks for being here. Thanks for being Financial Feminist and have a kick ass week. Thank you for listening to Financial Feminist, a Herfus 100K podcast. Financial Feminist is hosted by me, Tori Dunlap, produced by Kristen Fields, associate producer Tameesha Grant, research by Ariel Johnson, audio and video engineering by Alyssa Medcalf, marketing and operations by Karina Patel, Amanda LeFeu, Elizabeth McCumber, Masha Bakhmakiabeth,
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