The American Dream... (2025 Trump Predictions)
Chris Lamm • Published
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Why 2024 was one of the least affordable housing markets on record: higher rates from inflation and too few homes for sale. A short explanation from Chris.
Key points
- Chris said 2024 was the most unaffordable housing market he had seen, with average home prices around $400,000.
- He says the problem has two causes: higher interest rates due to inflation, and not enough homes for sale for years.
- In 2008, when the housing crisis began, there were about 4 million homes for sale. Over the previous year the number averaged about 1 million.
- There were about 15 million more households, and when demand exceeds supply it tends to protect prices from falling.
- More homes, more rentals and more options for buyers are what he says is needed.
Rates and terms subject to change without notice. Not a commitment to lend. Not available in all states. This is not tax, legal, or financial advice. Consult a qualified professional for your specific situation.
It is no secret that in 2024 housing was unaffordable. In fact, I think it was the most unaffordable market we have ever seen. This was a short video from December 2024 where I tried to explain why.
I know there are people who say, I remember when rates were 18%. That is true. But they did not have home prices averaging out at around $400,000. For people in the low to moderate income range, the combination has simply priced them out of the market, unless they had some rich uncle who was willing to give them a giant down payment, which is not most people. A lot of people would love the benefits of home ownership. They would take the risk. They just cannot do it.
With the election over, all eyes were on Washington and any decision that might make things a little easier. I told first-time buyers and people with low to moderate income to pay attention to why the problem exists. It comes down to two things. We have higher interest rates because of inflation, and we have not had enough homes for sale for years.
To put that in perspective, back in 2008, right when the Great Recession was starting because of housing, there were around 4 million homes for sale. Over the last year before I recorded this, the number averaged about 1 million homes for sale. Meanwhile there are about 15 million more households. When there is more demand than supply, it will always protect prices from falling. That is a big reason prices have held up even with rates this high, and it is why waiting for a crash has not worked for many people.
So what do we need? We simply need more homes, more rentals and more options for buyers, so people can get into a home and sellers have to compete with other sellers. Until that happens, the practical question is not whether prices will fall. It is how you can get into a home with a payment and a down payment you can handle.
There are ways to do that. Many first-time buyers do not realize how many down payment assistance programs and low down payment loans exist, and the right program can change the math. I would rather you hear that from a lender early than spend another year waiting for a market that may not arrive.
If you are in Redding or anywhere in Shasta County and you have been priced out in your head, I would like to show you the real numbers. Start with first-time buyer options or get your rate. MortgageOne is now licensed in 49 states.
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