Marketplace - Tension grows in the housing market

Episode Date: September 23, 2026

Bad news first: Mortgage rates are topping 7% and, fittingly, mortgage applications are down. On the bright side, home prices aren’t completely frozen and listings are actually up. Question is, in this stuck housing market, when will things budge? Also in this episode: A running resurgence parallels popularity peaks in the aughts and ‘80s, Nashville-style hot chicken sees international success, and writer Robin Wigglesworth argues the bond market built the modern world in his new book, “A Fabulous Debt.”Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories in today’s episode:U.S. mortgage rates climb above 7% in another blow to housing marketBonds are like the “hidden wiring connecting the global economy”Why everyone is running all of a suddenLike weddings, concerts are now destination affairsThe global appeal of Nashville hot chicken

Bonds. That's it. That's the whole open. Bonds from American public media. This is Marketplace. In Los Angeles, I'm Kai Rizdahl. It is Wednesday today. This one is the 23rd of September. Good, as it always is, to have you along, everybody. We're going to spend, I don't know, the first 10 or 11 minutes of the program today, directly or indirectly on bonds. And what I want you to do, every time you hear that word today is think of it as the cost of money. Bonds get sold and bonds get bought with an eye toward their yield. The interest rate, whoever issues the bond has to pay. And the yield on the 10-year treasury bond today hit 5.135%. Apologies for going to the third decimal place there, but when a government is borrowing, the way this government is borrowing,

thousands of a percentage point really matter. So, our indirect approach to bonds today comes via the mortgage market, where the 30-year fixed-rate mortgage now sits at almost 7.2 percent a two-year high. Meanwhile, and to absolutely nobody's surprise, the Mortgage Bankers Association says mortgage applications have dropped for the third week in a row. And as Marketplaces Rebenehial reports now to get us going, those two days. point means some things are happening in the housing market. So demand for homes is down, which makes sense.

Buyers aren't thrilled about buying when mortgages are this high, but something else a little we're happening too. We're also seeing more home owners deciding to list their homes. Darrell Fairweather is chief economist at Redfin. Either these sellers are just tired of waiting because it's been so long that mortgage rates have been high. And if they're waiting for a better market, maybe they realize that that better market isn't coming or they are getting nervous that prices might fall.

More sellers equals more supply, and you add in slowing demand and home prices have slowed down, rising just 2% yearly, which is slower than overall inflation and slower than wage growth. And that would be great, except for the high mortgage rates. Ali Wolf is chief economist for Zonda. Since the start of the year, consumers have lost roughly 10% in purchasing power. just from higher interest rates. When demand is like this and prices aren't rising much,

builders aren't interested in building new homes. Danushka Nanyakara does forecasting for the National Association of Home Builders. Their permits numbers are down. The starts numbers are down year-to-date. And building a home is kind of a long-term thing. So home builders usually look past short-term bumps in the road, like a flare-up of mortgage rates. But they are not looking past it because it isn't a short-term thing.

In our forecast, we don't have the mortgage rates coming close to six or below six in the next two-year window. There are some silver linings. If you're a seller, prices are at least still generally rising. If you are lucky enough to be able to buy, two out of three home builders are offering discounts to offset higher mortgages. And there are fewer bidding worse. In New York, I'm Sabri Beneshire for Marketplace. Wall Street today, bonds were selling off, stocks were selling off, oil was being bought. we will have the details when we do the numbers.

Our direct approach to bonds today is the new book from Robin Wigglesworth at the Financial Times. It's called A Fabulous Debt, the epic story of how bonds built the modern world. It's all about the historical and also the very current context in which the bond market operates. Robin, it's good to have you on. No, thanks, Guy. Thanks for having me here. Everybody listening to this program, because they've heard me say it a million times, knows what a bond is, right? It is people loaning government's companies, take your pick, money, and then the expectation is they get paid back. You, though, have spent 350-something pages saying it is oh so much more than that.

Discuss, would you? Yeah, I mean, the bond market is often seen as the boring sibling to the stock market. I think that's completely wrong. It is the bedrock to the entire financial system. It's actually where most lending happens. We think of banks is kind of the central engine of capitalism, but really it's the bond market. There's more lending happening through the bond market and through the banking system. And I just think the consequences of that shift are huge.

Well, keep on going. Why is it such a big deal? Well, if you think of how we've ordered the financial system, how we regulate banks, it's all order around the banks being the alpha and omega. Central banks were set up to backstop other normal commercial banks regulation. We re-regulate banks and make sure they're safe. But we don't really have the same guardrails around the bond market. And, you know, it's fairly transparent. It's incredibly dynamic. But it's, you know, it is just as prone to hissy fits as banks and the stock markets are.

Well, to that point, you're right here. The bond market, it takes money as its raw input, spits out. Factories, railways, hospitals, casinos, smartphones and semiconductors, wars and vaccines, all of which, yes, fine. But every now and then, as you say, it spasms. And then we have to deal with it. Yeah. And when the bond market breaks bad, that's a global problem. Think back in sort of 2000 and the dot-com bubble. That was like a big issue for the stock market. The stock market dropped nearly 50% from the peak to the trough. But economically, it was a bit of a nothing burger. It was like a very short, shallow recession. When the bond market broke in 2008, that was a global cataclysm because the bond market kind of represents the cost of money. Even if you and I don't invest in bonds directly, you know, the cost of borrowing in the bond market, it flows into absolutely everything else. And that's why, you know, the bond market is steadier than the stock market. It's

designed to be steadier. It's supposed to be more boring. But when it is not boring, it's usually very, very bad news for everybody. What do you make that of what's happening in the bond market now? And I'll preface the rest of this question by saying it is, it is not a crisis. Everything has been orderly so far. But as we sit here, you know, the U.S. 30 years at like 5.3 percent, the 10 years bumping up against five. It's been over it a couple of times in the last couple of weeks. And with $40 trillion in debt, the U.S. government now is paying a whole lot more for borrowing. And that, of course, trickles down. What do you make of the current situation? Well, I think the two quite interesting facets to this that might seem contradictory,

but they're actually almost complementary. And one thing is, you know, inflation is higher than we'd like. and it's been heading high because of the war in Iran. And clearly that means that central banks have to raise interest rates and higher interest rates and higher inflation. That's the nemesis of the bond market. So that means that, you know, to lend to the US government, certainly for 30 years, people want to get paid a bit more. But I do also think that, you know,

some of this is just returning to a more normal world. Like low bond yields that we had after the financial crisis and after COVID was actually a sign of economic malaise. and I think maybe now we're just heading back to a slightly more normal environment that is actually good for everybody except very indebted governments. And that is, of course, painful for the U.S. government more than anybody else. And given, you know, where we see the budget deficit heading, interest rates heading, I think it's not unfair to worry a little bit about the U.S. That trajectory, really, at the moment. Do you wish American fiscal policymakers would worry a little more, perhaps?

I don't know. I always return to St. Augustine's prayer. Lord make me chase, but not yet. I mean, I think about that way when I'm dieting as well. You know, the best time to start a diet is always tomorrow, right? Not today. And I think for politicians, it's very naturally the same way. I'm not as worried about the U.S. debt situation as many people are,

just because I think the U.S. does not tax that much. it could actually relatively easily make its situation look a lot better. I mean, don't forget, back in the late 90s, people were genuinely worried about the US paying down all its debts. Now, obviously, the war is completely different. But servicing its debts costs the US around 3.5% of GDP. And that's not great, but it's not apocalyptic. But it is a trillion dollars a year, man. Well, the US economy is, you know, what, $35 trillion a year?

So, you know, by taxing that a little bit more or spending a little bit less, things would look quite different. But I do think that it's worrisome that there seems to be zero inclination on either side of the political aisle to do anything whatsoever about this. And so I'm not worried about where the US might be today or next year or even in five years. But given the current trend lines, it just look, you know, in 10 years time, suddenly the US is going to be spending around 5% of its gross annual economic output on just servicing its government debts. The trend lines are bad unambiguously. I'm not going to sugarcoat that. The Secretary of the Treasury, Scott Besson, is doing what he can to try to, one might say control. He would probably say, in fact, he has said, you know, bring it back to neutral or

whatever it was, equilibrium. And yet the bond market seems to be ignoring him. Yes. Well, the bond market is not great at taking direction from finance indices. and it's quite a change seeing Scott Besant, the Treasury Secretary, doing things that Scott Besant, the hedge fund manager would find, I dare say, laughable. Increasing the buybacks intervening in the Japanese yen, it's like trying to put out a, you know, a raging inferno with a little water pistol. The buybacks, you could double it, quintuple, you could 10x the buybacks. And it wouldn't really matter to the treasury market, where over a trillion dollars were

of securities trades every single day. And Bessent is really only fiddling around at the edges. And by doing so, he actually draws attention to these issues. And I think actually makes them worse, not better. Let me take you as we wrap this up. I want to take you to the end of the book. And the story of, I think you call it, and it is the oldest performing bond in the world.

Tell us that story, which is. And more importantly, why it matters and why you decided to end this book with it. Well, I mean, I'm going to sound incredibly sad, but I actually attended the 400th birthday party of the world's oldest bond. It's written on goat skin. It used to be issued by Dutch Waterworks to build to repair some dikes 400 years ago. The dike is still there in a bend of a river in the Netherlands,

and the bond still pays interest around 13 euros a year. So, you know, it's not much. It was gifted to the New York Stock Exchange. It's a symbol of friendship between Amsterdam and New York, because New York and New Amsterdam. Yeah, they were founded in 1624 when this bond was born. Look, I know this is going to make me sound super geeky, but I thought it was exhilarating. I don't say it's up short. I think it's a cool story.

Go ahead. Yeah, no, exactly. And look, for me, museum archivists talk about this world reify. Something that makes very old history seem relevant and real. in a tangible sense. And this bond, for me, sums up how these bond instruments have shaped the world that we live in today in a million different ways throughout history, in the ways that we don't always see. It's like the hidden wiring that connects the global economy then and now, for me, that was just very exciting being part of that, that birthday party, although I have

to admit it wasn't nearly as well attended as I would have liked to be. And my wife thought I was a little bit weird for going there. It's a good story. It's a good story. Robin Wigglesworth is at the Financial Times. He was also more to the point on author. His most recent book is called A Fabulous Debt, the epic story of how bonds built the modern world.

Robin, thanks a lot. I appreciate your time. Thanks for having me on, Kai. I really loved it. Hey, remember Peloton, the spin-bike wonder-kind of early pandemic days? Well, it's been a rough couple of years since for the company. Hence, its announcement this week that it's going

all in, those are their words, all in, on a new line of, wait for it now, treadmills, because running, I guess, is the new, new thing. Marketplace's Caitlin Tan, how's that one? Noah Schutz's most recent run was in the mountains of Western Wyoming. Which was about a 20-mile round trip. Shoots has been getting more serious about running in the past three years. He even started a running club this summer in his rural town of 2000. We just don't have a huge population center, and it's such a fun way to gather. Clubs like his are popping up all over the U.S.

Jen Ziers are all over that. Jan Seeley organizes a marathon in Champaign, Urbana, Illinois. These social running clubs are kind of an alternative to dating apps. Running clubs and runners in general are traveling to more 10Ks and half marathons. All races, including ours, are selling out soon. sooner and with higher numbers. This year, 1.1 million runners entered a lottery to run the London Marathon. Only 59,000 got in.

This is what you would call the third running boom. The first was in the 80s, then around the financial crisis, and now post-pandemic. Running does boom in periods of instability. Lee Glendorf writes a sports fashion substack. She says this generation of runners dress is different. Instead of bright nylon track shorts, companies are making sleek streetwear. All black with a bandana and bug-eye Oakley sunglasses and then very chunky footwear.

Like the legendary Olympic runner, Florence Griffith Joyner said, dress good to look good, look good to feel good, and feel good to run fast. I'm Caitlin Tan for Marketplace. Coming up. I don't think we're at the limits yet of what hot chicken can do or be. Honestly, sky's the limit, I'd say. First, though, let's do the numbers. Down industrials down 352 on the day, 7 tenths percent closed at 51,511.

The NASDAQ down 308 points, 1 in 110 percent, 26,936. The S&P 500 dropped 58 points, three quarters of 1 percent, 7706. McDonald's says it's planning to invest $8.5 billion to modernize its restaurants over the next decade, Investors were like, yeah, and shares of the company down four and eight tenths of one percent on the day. Elsewhere in fast food, jack in the box, shares added more than four tenths percent. Restaurant Brands International. That's parent company of Burger King and Popeyes in case you didn't know. Saar stairs declined more than a third of one percent.

Bonds down yield on the 10-year T-note. The close was 5.1-1%. You're listening to Marketplace. This is Marketplace. I'm Kai Risdahl. here's a question for the concert goers among you. How far is too far to travel to see your favorite artist? Because more and more, live music is about fans that are traveling to the artist instead of the other way around.

Ben Cesario wrote about the rise of long-term music residencies in the New York Times. Ben, good to have you on. Welcome to the program. Thanks very much. I remember when, and I guess I'm going to date myself here, but I remember when Celine Dion did that big residency in Vegas. And since then, things have kind of. of exploded. What's going on? It's become kind of

the new trend in the music industry of putting on sort of more shows in fewer places, sometimes just staying in one place and having the fans come to you rather than touring all over the place. Well, so let's

break it down to its component parts. What's in it for the artists? Obviously, they don't have to travel as much, right? They get to hang out and do big elaborate things and be in one place. Yeah, for the artist, I think, it's easier. They're in one place. Sometimes it's more comfortable for them. For the tour production, it can be cheaper. They're saving money on the trucking and gas and some of the crew that they might use. But a lot of times, the money that they might have saved from doing

that stuff, they sometimes put into the production to make it bigger and flashier and sort of, I guess, justify some of the higher prices that they're charging. Yeah. Speaking as a guy who has friends, actually, who went from L.A. to Vegas, not all that far, but it's still a Schlep, to see BTS. Fans will travel to see these shows. They will. That is something that the music industry has certainly noticed, is that I think basically starting with Coachella was really, even though that's not a residency, that's a festival. But they started noticing that people would travel significant distances, even when they didn't know. know necessarily who was going to be on the bill. And then as you mentioned, Celine Dion, also Elton John, they were, they started residencies in Vegas in the 2000s. And we saw people

come from all over the world to be there for that. Are they paying more of the fans they must be, right? I mean, you know, tickets are expensive, but I imagine these residencies make them more expensive. I mean, the prices are high all over the place on the sort of more in-demand concerts. But I think for the residences, to be able to call the kind of special show, yes, you can charge a little bit more. Is this just an American thing? Or people sending up residencies in like Paris and, you know, Rio and stuff like that? There's a lot in London and in Paris. I'm not sure about Rio, to be honest. Well, fair enough. I mean, you know, I kind of picked that one out of nowhere, but, you know, European capitals are places people go, right?

There's a lot in London. There's some in Paris. When Adele, did her residency a few years ago. She did some in Vegas. And then she went to Munich, Germany, where they built a venue just for her show and then tore it down when it was over. Wow. So one imagines this just continues, right? Because the face of music is changing, the way they make their money, these artists, and obviously the storing companies make their money, is now live performances, right? It certainly is. And I think right now it still has kind of the gimmick factor. It comes across. It's something new and it gets attention. And so I do think it's here to stay, although when prices get higher and higher, there's always kind of the worry, when will they get too high that fans will rebel and reject the prices? But so far, we have not really seen that.

Believe me when I tell you, in broader business and economic journalism, we're thinking about that too. When will consumers rebel? That's just a thing that's on our minds. Ben Sessario at the New York Times. Ben, thanks a lot. I appreciate your time. Thank you. We did a story 16 years ago about chicken. A chicken sandwich, more accurately, a Nashville spicy hot chicken sandwich specifically. And in the decade and a half since, said sandwich has gone global. From WPLN, Blake Farmer, who did that original story for us way back in the day, he's got the update. After high school, Chin Chin moved off to Toronto. He patronized the one place serving his

hometown specialty. They put a little bit of spicy season on it and called Nashville Hot Chicken. That was a little bit offended. I was like, this is not Nashville Hot Chicken. At the time, he was looking for business opportunities and didn't want to reinvent the wheel. So he started Chen Chin's Nashville Hot Chicken in Toronto, and it took off. This summer, he opened one here in Nashville, a city so saturated in hot chicken that people are putting their own spins on it.

For Chen, it's Chinese Cessuan flavor. In his restaurant kitchen, he blends up a bit of the oil his chickens dipped in after frying. So this is a medium seschuan spice, but it's infused with Asian and Nashville flavors. All right. Here we go. I'm into that. Yeah, it has a lot of flavor, right? Sweet in the front? Zing in the back. As many do, Chin pays his respects to the place credited with starting it all,

Prince's Hot Chicken Shack, which has been around since 1945. on his first pilgrimage as a teen. My buddy took me to princes. I ate the hottest chicken there. I was a spice fanatic at the time, so it definitely hurt me, but I loved it. Pain and pleasure. Connoisseurs will travel long distances

for the experience. The chicken is so hot that people describe the feeling as almost a drug-induced high. Well, my mother has always said when I was growing up, if you have what the world wants, they are beat a path to your door. And that has proven to be

right. Andre Prince still helps run the family business and customers now come from all over. Just Saturday, we had people there from Iceland and I couldn't believe it. What's more incredible is how many have tried to take the dish back home. Bill Purcell is the former mayor of Nashville who launched the city's hot chicken festival to promote and stake a municipal claim to the dish 20 years ago. I have been to Bangkok, Thailand, and I have eaten Nashville hot chicken at foul mouth, and it is very close. He also can vouch for a spot called Rockadoodle in South Korea, with good reports from Australia, Singapore, and South Africa. He says it's embraced around the world because the dish is so unique and yet familiar to other cultures known for their spicy fare. I don't think we're at the limits yet of what hot chicken can do or be. The number of Nashville hot chicken restaurants worldwide is close to 2,400 by his count, though even the largest chain has fewer than 20 locations.

The reality is that this decades-old flame has been fanned by a strong tailwind in the poultry business. Chicken chains of all kinds have been growing as appetites prioritize protein. Wingstop alone added nearly 400 locations last year. Compared to beef and pork, chickens still a bargain. The value proposition is there. I also think it's a very versatile protein. Professor Jada Thompson studies poultry markets at the University of Arkansas, which sits at the heart of the country's chicken farming business. The growth in fast food chicken has made poultry one of the few agricultural sectors where farms are being added every year. As for Nashville hot, Thompson says, it's got staying power.

It's so hot. Like, I'm crying. There's tears. You know, there's not. But then I also continue to eat it and I still talk about it. You can always order it mild, says Chin Chin. We just want to bring flavor. I mean, we'll just still kill you if you want. That's something that every hot chicken entrepreneur takes pride in. If you're looking for an unforgettable experience, go for spice level five, poultry geist. In Nashville, I'm Blake Farmer for Marketplace.

This final note on the way out today, part of why what happened in the markets today happened. We got something called the S&P Global Flash. U.S. Composite Purchasing Managers Index. Basically, it's a snap reading on business activity in this economy. And the upshot is that businesses are doing pretty well and feeling pretty good. New orders are up and employment is up. There are some hiccups, yes, supply chain snags and input prices, which is another way to say inflation. But traders looked at that data today, both stocks and bonds, and figured the Fed is going to have to raise interest rates more than people had been thinking they would, Hence the sell-off.

Our media production team includes Brian Allison, John Foki, Montana Johnson, Drew Jostad, Gary O'Keefe and Charlton Thorpe. Alex Simpson is the manager of media production. And I'm Kai Rizzdahl. We will see you tomorrow, everybody. This is APM.