The Landlord Lens - Is Affordable Housing Really Gone for Good?

Episode Date: February 6, 2026

For years, buyers and landlords have heard the same advice: just wait.When mortgage rates fall, housing will become affordable again.But new data suggests that returning to pre-pandemic affordability would require mortgage rates, wages, or home prices to move in ways that are historically unlikely.In this episode of Landlord Lens, we unpack why the housing market may not be facing a temporary disruption, but a structural shift that’s been building for decades.

There is no help necessarily coming to the Los Angeles, the New York's, the San Diego's of the world. We'll never have the same affordability we had just in 2019. If there has been a theme of the last five years, it has been affordability, inflation, the rising costs of things. Realtor.com just released a report about affordability relative to housing. They're basically making the case that affordability rates of 2019 will never come back. And they published some eye-popping statistics about it. They said, for affordability to get down to that level, mortgage rates would need to fall to 2.65 percent, or household incomes would need to jump 56 percent, or home prices would need to fall 35 percent.

I don't know about you, Seamus, but I really don't like that last one. Yeah, it's a very scary idea. for the 60% of the United States that owns property in the United States. Yeah, 35% of your primary wealth asset disappearing. Pretty scary. Yeah, so let's untangle these stats a little bit. One of the things we looked at is median income to median housing prices, right? To try to understand just how the ratios change over decades.

When you do inflation adjusted, you don't get quite the eye-popping stats that our friends over at Relater.com put out. But you still need, for example, income to arise about 15% household income in order to get to the same affordability ratio as we saw in 2019, 2020. So that seems a lot smaller than 56%. It absolutely is. And the good news is there's precedent for it, right? And between 2010 and in 2020, we actually saw 36% increase in median income across the United States, which is fantastic. Yeah. So the other way, though, to think about that 15%, and I know realtor laid it out as one of these three things would need to happen, but that 15% jump in median household income also would assume that current median house prices stay flat, right?

Exactly. And that's the challenge, right? As income goes up, a lot of time housing prices went up. But what you could see, right, jump in median income through a economic boom and a decrease in interest rates, right? Maybe not. not to 2.65%, like Realture.com says, but if we get that back down to four, under four, affordability goes up a great deal for those purchasing homes. Gotcha. Okay. So, so in theory, hold out for an economic boom and everything gets better. Yeah, I mean, it's all cycles, right? What's interesting to, I think, historical perspective, is right now the ratio, or at least from the data we have in 2024 and into 2025,

we are about or surpassing where we were at the peak previously, which was in 2006, when we had the great financial crisis. Housing prices were at an all-time high then. That was the highest income to home price ratio we've ever experienced. We've now surpassed that. So there is no doubt that we are in unprecedented times. I think the good news, though, is there is some potential relief around the corner. not just by income going up, but also with some of the legislation and policies being pushed for in the United States right now. So, but no one can predict the future, right? And banking on an economic boom or some productivity gain that will impact workers generally seems risky to do.

And, you know, I'm a coastal guy having been born and raised in San Diego, California. So I experienced that rent increase before moving out here to Colorado. And it's a lot more stark than some of these numbers apply. There's a tremendous local effect here. Some markets' income to home price ratio is way more exaggerated than others. So the reality is if you're looking for affordability, it may mean you have to move, right? Not every market is equally affordable. In fact, it's not even close, right? As you look to some markets in the United States, even really attractive markets like in Austin, which has actually experienced home prices dropping.

Right. Right. With no drop in income. Yep. And therefore, that ratio has improved a lot. So this statements certainly aren't blanketed across the United States. Part of the conversation we were having before we started filming was about demographic trends and how those will impact home prices.

I know you reference an economic boom. That's another outside event that could impact affordability. But we also have an aging population, most of whom own homes. Yeah, it's a different kind of boom, right? It is the boomers who own about 40% of all the houses in the United States. And so when you think about a supply and demand imbalance, right? There's a lot of demand today, limited supply. A lot of that supply is actually held by this aging population, which is reaching an age of downsizing.

And also, bluntly, just reaching an age where they're going to start dying, which means those properties are either going to hit the market. In some cases, maybe they're passed on to their offspring. But in general, that is a big source of supply. that should continue to trickle in over the next handful of years. It's one of the counterbalances, I think, to some of Realtor.com's claims that we'll never have the same affordability we had just in 2019. I want to drill in on something you said earlier about the reference to the financial crisis as being the last time we were at this ratio level, right?

What would you say to somebody who sees that comparison or sees the comparison to the ratios in the 70s, which were followed by the late 70s, right? And think, how are you predicting an economic boom right now to save us instead of a downturn in the market? I think you look at some of the causes of the financial crisis. It was a result of the way banks were actually lending at that time, the amount of risk they were taking on. The free flow of capital from banks is actually part of what increased the drastic price of

housing, right? when a banks will lend anyone, any amount of money, right, and are kind of risk on as opposed to risk averse. It just made capital a lot easier to get, which caused a lot of challenges. I don't hear anyone talking about mortgages being really easy to get right now or capital being really easy to get. In fact, the conversation's kind of the opposite, right? Interest rates are hard. Getting a mortgage today because of the increased interest, which therefore increases the monthly payment is making it more and more challenging for people to actually tap into the capital market. So that's why I see a difference, at least in the circumstance then versus circumstance

today. The other circumstance, though, that you referenced earlier, that's kind of new in this situation, is this aging population with a much smaller younger population supporting it. How can we be sure that that supply wave actually doesn't outstrip demand? Yeah, which has happened in Japan, for example. Right. Yes, yes, yes. Where they're paying people to move into houses, right? I think what's really interesting is does our lack of replacement, right, our fertility rate of about 1.6 right now, right? Well short of the 2.1 replacement that we need. The timeline of that catching up to the boomers moving on, right?

And therefore, a bunch of supply hitting the markets is really, really interesting, you know, how that will level out. Now, the one thing in the United States, because of immigration, the fertility rates haven't had as big of an impact on our population, right? our populations continue to grow, therefore there's been continual demand over time. It's hard to imagine the United States is in a situation, though, where the population is drastically decreasing because it is the most attractive place to live in the world, most would say, especially those outside of the country.

And so I think we always have the option of opening up from an immigration standpoint to make sure that we're keeping things balanced and we don't see a huge plummet on home prices, which are going to affect, like I said, 65% of the people need to know. United States that own homes. Okay. So I'm going to draw a couple predictions from from what you said. And you tell me if I'm off base. All right. First, it sounds like there is no help necessarily coming to the Los Angeles, the New York's, the San Diego's of the world. And those local markets might continue to be very expensive for the median income in those places.

Yeah, there's always been places that were unaffordable, right? In the United, in the United States, these cities have never been cheap, right? They've never been affordable, but companies that are located in these places also pay more, right? Yeah. And so the, the market's at work in each of those, each of those areas, but agreed, I don't see them getting affordable because they never were. Gotcha. Okay, because they never were. Okay. And the second prediction, I think, I draw from what you said, is that in neighborhoods that are predominantly elderly, you have a higher risk of the value of a home you buy there dropping sooner. Is that true?

I think that is interesting, right, in terms of that hitting the market. I see it actually in local market in Fort Collins where I live, where there are a lot of neighborhoods that were built in around 2000, 2001, purchased by a lot of individuals that at that time had large families, right? So the 4,000, 5,000 square foot home made sense. They're now into their 60s. Yeah. Right.

And they're selling. And I've blown away how many of those homes sold in 23, 24, and even in a very slow 2025. And I think it's directly a result of a lot of empty nesters saying, hey, maybe we'll downsize. Maybe there's somewhere else we want to live. Gotcha. Okay. So maybe that wave hasn't hit in places like that, but it might? I think it'll keep trickling in.

And it's probably one of the pressures that keep home prices relatively flat, which is great news. Because like we were saying, we need. income, we need time for income to continue to catch up, right? The converse of that, I guess, is around landlords looking for opportunities. If I'm a real estate investor looking for a residential unit, I want to buy, and maybe I'm playing the appreciation game, I should be looking in neighborhoods that are attracting young folks to buy. And what should the mix be of owners owned a rent in the neighborhood I'm buying in?

So I think as a landlord, it's hard to expect, based on the buzz around the affordability crisis, it's hard to expect that your assets are going to appreciate a large amount and a short amount of time. If you're a landlord that just got into this, let's say, in the 20 teens, right, you saw rapid appreciation over the last five years. It's like a cheat code. And your assets. Yeah, it was, it was investing made easy, right?

you got to remember that sure maybe you were smart and saw it coming but most of us just happened to accidentally time a cycle really really well right i don't think that you can go into your next set of investments uh expecting such a large gain in the first five years right so it's very much worth looking and i like studying history a lot but looking at okay what do markets do for housing over 30 years 20 years right and just kind of broadening the timeline that you think about for your real estate investment and then the other pieces uh making sure you can cash flow out of the gates. Right?

Gotcha. Just think about from a cash flow standpoint, right? Is this a attractive property? What can I do to make sure that I can command the kind of rent that I do need to cash flow? And then also making sure that you're not wasting any additional expenses, right? Don't use a property manager. Save that money, right? Shop around for insurances and things like that.

Don't just pick the first one off the shelf to make sure that you're bringing some cash in because you're going to need to pay down that mortgage to get equity where the last five years, we didn't have to pay a dime, right, on our loans to get an explosion in equity value. We're always saying don't hire a property manager. But then in the same sentence, often right before, we're saying make sure you can cash flow easily. A lot of our audiences are in markets where it's really challenging to find that deal. and the idea of buying remote and not using a property manager feels impossible. I mean, should they just sit on their money?

What's what's their play? So John, what you're talking, what you're touching on is being a remote landlord. Yeah, yeah. How do you do it? And well, that would be a whole other video that we should definitely put out there. There's definitely methods with which you can approach it through technology and services, building your own your own team. Being the GC, the general contractor, right, of property of management as opposed to outsourcing

that to a property manager that can get you down under, you know, 4% of monthly rent and expense and even much lower, which makes cash following a lot easier. Who's those 8, 10%? Right? There are 8, 10% services that are actually doing that. You're suggesting basically being the, you know, picking a market, developing a network, managing that way? Yes.

Okay. Yep. And through technology and software like TurboTenet and opportunities like TurboTenance Autopilot, where we actually take some of the management off your hands, there's ways to very efficiently, cash efficiently, manage your property from afar so that you can keep investing in markets that maybe are more affordable and more attractive than the one you live in. Okay, so before we sign off, we're going to make predictions. First, do you think Seamus affordability will be better or worse in one year in America? I think it's going to be slightly better because I think interest rates will drop a little bit, and I don't see anything that's going to make home prices continue to go up. In fact, I think they're going to really flatten out, and we've seen some markets where they're dropping. So I think it's going to be the smallest amount better.

I'm not sure people will actually feel in their pocket, but I think the data will show that. Okay, I'm going to take the opposite. I think it's going to be slightly worse. Okay. I think that homeowners will continue to be the benefit of the current economic wave of automation and technology being implemented more widely. You see a lot of reports about the productivity of the economy going up while workers are staying flat or going down in some reports. And so I think that's going to impact the median income without harm. harming the home prices because I think there will be enough wealth in that class to continue to float it.

So I think lower. All right. I dig it. Okay. Now in five years, all right. This one is a little more hand wavy in five years? Is affordability better or worse than today? I think affordability is better.

I don't think it returns to that 2019, 2020, right? Pre-pandemic rates necessarily. But I think it's definitely lower than the peak that we're seeing today. I think 2025 we really hit our peak. Okay. I also think affordability will be better in five years. I don't see how in today's world with affordability being one of the top three issues people are talking about all the time, that that doesn't get solved. I know it's more complicated than solving for inflation, which we did turn around in a matter of years after it became a big issue. But I do think we'll figure out a way to solve for housing affordability within five years and have some of it implemented to impact things. I love it. Now, if you think that we're completely wrong, right? Things will be substantially worse, substantially better in the next year or five years. Let us know why in the comments. We're excited to learn and even get the debate going. for free at turbotenant.com.