The Rundown - Deep Dive: How an Entire Generation Got Locked Out of Homeownership

Episode Date: November 15, 2025

Young Americans are facing the toughest housing market in modern history. Home prices have surged, supply has evaporated, and mortgage rates have more than doubled since 2020, pushing the average first-time buyer age to 40 years old.Zaid breaks down the impossible math facing young buyers, why the U.S. doesn’t build enough homes, and why ideas like 50-year mortgages won’t actually fix affordability.This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit Public.com/disclosures.

Welcome back to the rundown for another weekend deep dive. Today, we are talking about the housing crisis facing young buyers in the U.S. Homeownership has become the defining source of economic anxiety for young Americans, soaring home prices, record low supply, and mortgage rates that have doubled since 2020 have locked an entire generation out of the housing market. That's why today the average age of a first-time homebuyer is 40 years old. So in today's episode, we'll break down why the housing market is so broken. We'll look at the impossible math facing young buyers, why there isn't enough supply of homes,

and why solutions like the 50-year mortgage won't solve the affordability problem. We get a great one for you today. Let's dive in. Let's start by looking at the math behind the housing market and why it's so depressing for first-time homebuyers. The average price of a home in the U.S. in 2025 is around 420,000. and that's up 50% since 2019. That's pretty wild, right? But it gets even worse. Mortgage rates have doubled since 2021. So if you combine rising home prices with rising interest rates, the monthly payment on a home has absolutely exploded. Just to give you an example here, if you bought a house pre-pandemic,

the median price of a home was around $260,000 and the average mortgage rate was around 3.8%. So your monthly mortgage payment would be around $1,000 a month. Today, that same house is now worth around $4,000 and the average mortgage rate today is 6.4%. So your monthly mortgage payment today comes out to $2,100 a month. So that means the cost of buying an average home has more than doubled in the last five years. According to research from Goldman Sachs, the average monthly mortgage payment before the pandemic was around 20% of a person's income. That has now jumped to over 30% since since 2022, which is a historic high. And that explains why the average age of a first-time home buyer in the U.S.

is now 40 years old and why first-time homebuyers have fallen to just 21% of the market, which is the lowest share since 1981. And if you look at the median buyer of any home, not just first-time home buyers, it is 59 years old, which is another record high. It seems like the only people that can afford to buy a home these days are boomers because they got the cash and they got the home equity. in their previous home, which has skyrocketed in value over the last few years. So that's the math behind the housing problem right now.

But how did it get so bad? Well, let's talk about it. There are a few big factors that are contributing to today's housing prices, one of which is the lack of supply. And the reason for the lack of supply goes all the way back to 2008, the last time we had a housing crash. See, ever since 2008, home builders have been playing it safe when it comes to building homes. These home builders don't want to get burned like they did in 08 when the housing market

collapsed. So that means that we have been underbuilding homes for the past 15 plus years. J.P. Morgan estimates that the U.S. has a shortage of 2.8 million units and that it could take up to 10 years to resolve this shortage. Goldman Sachs thinks the problem is even worse with a shortage of 3 to 4 million homes. Another reason for the housing shortage are restrictive zoning and land use laws in most cities, which makes building homes really expensive or downright impossible. Some of you guys know I have a civil engineering background. I've done some work on land development projects. I'm somewhat familiar with it. And yeah, dealing with regulators and getting permits can be a pain and sometimes a long, drawn-out process. And then you add in the fact that

volatile immigration and tariff policy these days adds a level of uncertainty to both labor and materials like steel, aluminum, and lumber, home builders are just holding back on building more homes. So that's a very short and quick explanation of the supply issue. There aren't enough homes and it's hard and expensive to build new ones. Housing supply problem could be its own 20-minute video. Now, the other factor leading to elevated prices is the lock-in effect. Now, this goes back to the low-interest era following the pandemic. Remember, the Federal Reserve dropped interest rates to pretty much zero,

and homeowners use that opportunity to refinance their mortgage into a low interest rate. In fact, today, 50% of mortgages are still under 4%. And about 80% of mortgages are paying less than 6%. So the homeowners that have these super low mortgage rates, they don't want to sell their homes and give up the 3% rate. Think about it. Why would a homeowner want to sell their home that has a 3% locked in rate to buy another home at a 6% rate? So these low interest rate mortgages are acting as golden handcuffs. Nobody wants to sell their home, which is leading to a shortage of supply.

In fact, inventory right now is at historic lows, and that's keeping prices stubbornly high. But look, there is some positive development for homebuyers. So let's talk about it. You know, this episode has been pretty bleak so far, so I wanted to highlight some reasons to be optimistic. There are some positive developments. For one, the rental market is finally cooling off. The latest data shows that apartment rents are now down in half of the nation's 150. 50 largest metro areas. And this is happening for two reasons. In cities like Denver and Austin,

there's been a big supply wave of new apartment buildings hitting the market. A ton of apartment buildings were built over the last few years. And when more supply becomes available, rents go down. Supply and demand, right? Now, in other cities like L.A. and Washington, D.C., rents have also come down, but for factors like a slowing local economy and a cooling local job market. But overall, though, renters are finally seeing some relief all over the country. National apartment rents fell 0.3% month over month in October. And rents have now dropped for three months in a row. In fact, with the cost of homeownership so high and rents coming down,

J.P. Morgan says that the cost of owning a home right now is roughly 40% higher than the cost of renting right now. So hopefully this leads to renter saving more money towards a down payment on a home. Now, a second reason to be more optimistic about the housing market is that politicians are finally starting to take this issue seriously. The housing affordability crisis has gotten so bad that has become a top political issue. In fact, last week, President Trump proposed the idea of a 50-year mortgage. The idea being that a 50-year mortgage will lead to lower monthly payments for homebuyers. Now, personally, I'm not a big fan of the 50-year mortgage. Now, people have done the math, and it would reduce monthly payments slightly,

but home buyers would be stuck paying much more in interest over the life of the mortgage. On top of that, there's a chance that a 50-year mortgage just makes housing prices even more expensive because it allows people to bid even higher on a home. The way that economic nerds describe it is that a 50-year mortgage is a demand-side gimmick without addressing the supply-side problem. So I'm not a big fan of the idea, but I like the fact that politicians are starting to take this issue seriously. And maybe this could lead to more ideas and maybe even reductions and regulations and looser zoning laws in cities and states all over the country. To me, that is the biggest reason to be optimistic.

And finally, there's also the Fed. The Federal Reserve has started to cut interest rates with more rate cuts expected. So that could lead to lower mortgage rates, which not only lowers monthly payments, but it would also start to chip away at the lock-in effect that we talked about earlier. You know, a homeowner right now that is locked into a 4% rate isn't going to sell their home when rates are at 6.5%, but they might be willing to sell their home if rates drop to around 5%. So lower mortgage rates could be key to getting more inventory back on the market, which could lead to a drop in prices.

So what's the takeaway here? Well, if you're under the age of 40 and feel like buying a home is impossible, well, you're right because it pretty much is right now. Because of factors like rising interest rates and a lack of supply and golden handcuffs of lower mortgages, the housing market is stuck right now. And the only way to really fix it is to increase supply, you know, build more houses. The good news is there is more political capital focused on the housing of affordability issue. The 50-year proposal might not be the best start, but at least it's a start.

And maybe this kicks off a wave of deregulation and less restrictive zoning all over the country. And in the fact that mortgage rates could potentially be headed lower due to Fed rate cuts and rents are coming down, maybe in the near future buying a home won't feel so impossible. Well, all right, guys, that's it for today's weekend, deep dive. Hope you guys enjoyed that episode. If you did and you have like five extra seconds, giving us a five-star rating on Spotify and hit the thumbs up button on YouTube. Also, let us know in the comments of what your thoughts are about the housing market that there was anything that stood out to you in today's episode, especially if you disagreed

with something. We're always looking for feedback. And if this was your first time listening to this podcast, just an FYI, we post 10-minute episodes every single day throughout the week, recapping the stock market and all the major headlines. So if you want to stay up to date on everything happening in the markets, make sure you guys or subscribe to the podcast and tuning in every day. Thank you guys so much for listening, watching, and commenting.

Shout out to Mike and Connor for all the work behind the scenes. And we'll see you guys back here tomorrow. Frozen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play Ojo. The online casino with all the latest slot and live casino games. What you win is yours to keep with no wagering requirements.

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