The Peter Zeihan Podcast Series - The Death of the First-Time Home Buyer || Peter Zeihan

Episode Date: April 1, 2026

Buying your first home is one of those major milestones that your parents and grandparents probably didn't even think twice about. Now, that milestone is slipping further out of reach for the average American.Join the Patreon here: https://www.patreon.com/PeterZeihanFull Newsletter: https://bit.ly/4dPbkeK

Hey all, Peter Zion here, coming you from Colorado. Today, we are taking a question from the Patreon page, specifically about housing. First-time homebuyers in most parts of the country are now dealing with prices that are in excess of 300 grand, which basically traps them in paying rent forever because getting the cash that's necessary to break into the housing market and start building wealth in terms of equity

is almost impossible now, unless you're lucky in some way. Totally true. So, Will changes in Democrats? graphics bring down prices in housing. Yeah, but probably not in the timeline that you're hoping for, and it's not going to be all because of secondary effects. So a couple things to keep in mind. Number one, when it comes to economic growth, about 1% of GDP growth happens every quarter because of new home construction, and about another half a percent of GDP happens from people basically furnishing and renovating those homes. So 1.5% GDP, which a lot of people in advanced

countries who have negative population growth considered to be really good because they don't longer have consumption-driven growth. So having any sort of investment-driven growth like this is, you know, great. But if you have negative population growth, a lot of that kind of bleeds away. The question is, how fast can it bleed away that you actually burn through some housing stock to the point that supply and demand start to, you know, rearrange? The thing is, even with the Trump policies we have right now, which have just... generated negative population growth in the country. In order for supply to drop more than demand, you need to have a lot faster population decline. Two problems there. Number one, right now,

on average, about 1% of the housing stock is either destroyed through fire or tear downs every year. So until such time, as population growth drops faster than home destruction, you're not going to really have that change in supply and demand that you're hoping for. The easier way is simply to build more homes. The second problem is age blocks. As you get older, you get wealthier and everybody needs a place to live. So you're always going to have demand from people over age 40 and especially over age 50 who have more capital.

That's demand is hardwired in. And what we were thinking maybe, this is a few years ago, we were thinking that as the baby boomers retired, they might be moving into group living homes. It turns out that they really just want to. to age and place in their homes. And a lot of millennials started moving into retirement communities that had been retooled to be kind of community centers because they liked the social aspect of living more than the baby boomers. And so in many ways, from a cultural point of view, from an economic point of view, we got the worst of all worlds and the people who had the money decided to sit on

their money and the people who really needed to be starting their lives decided to basically live in a party house. That is now changing. Almost all the baby boomers are now retired. The last of them will be retired by 2030. And the millennials, finally seven years later than average generation ages, started having kids and buying homes and getting married and all that good stuff. So the numbers are starting to make more sense, but this is a multi-year, maybe couple of decade process. And as you all know, that is more than enough time for us to have other changes to the macroeconomic situation that can say generate a huge swath of new home construction or really tank lending costs. and lending costs is really where the problem is going to be, because as the baby boomers retire from the system completely, we just won't have as much active capital in the system. And if there's not as much active capital in the system, it's going to be harder for banks to raise the capital that's necessary to then lend out. So I would argue that while we might get a little bit better structure in terms of number of homes versus those who need to get it on the low end, we're also going to see higher financing costs at the same time, which is going to leave them more or left in the same situation. at least for the rest of this decade.